Gov. Kim Reynolds has introduced a sweeping property tax reform bill in the Iowa House and Senate that her office says would save Iowans an estimated $3 billion over the next six years.
The proposal comes as property taxes across the state have increased by an average of more than 10 percent over the past two years, rising faster than inflation, wages and population growth.
To slow that trend, the governor’s plan would cap local government revenue growth at 2 percent plus new construction. The cap would apply to most taxing authorities, with exceptions for debt service and school funding. Reynolds says limiting local spending is the most effective way to protect taxpayers.
The bill also creates a $10 million grant fund to encourage cities and counties to share services or consolidate positions, following roundtable discussions Reynolds held with local officials last fall.
Other provisions include moving property assessments to a three-year cycle, shifting the burden of justifying large valuation increases to assessors, and tightening rules on Tax Increment Financing districts.
The plan would also freeze property taxes for homeowners age 65 and older with homes valued at $350,000 or less, and create FirstHome Iowa Accounts to help families save for future home purchases.
