Capitol Letters: House Committee passes historic property tax reform

State Rep. Megan Jones

House Study Bill 596 passed out of the House Ways and Means committee this week. The historic property tax reform bill contains multiple divisions and covers a breadth of topics that holds the property taxpayer’s interests at heart — not the government’s.

First, the bill limits local government reserve accounts to 35% of current budget. This will keep local governments from hoarding taxpayer money and building up unnecessarily big reserve accounts when that money is better off in the pockets of its residents. Next, the bill caps local tax revenue at 102% year over year. No more hiding behind increased assessments while saying, “but we did not raise the levy!” While true, that statement was never the whole story. With assessments soaring, local governments never had to raise levies to collect more money. With this revenue cap in place — it will not matter what assessments do, local governments cannot collect more than 2% over last year. Everyone realizes that local government costs are going up — but so are the costs to everyday Iowans. This revenue limitation provides a reasonable amount of growth to the local government while keeping things stable and predictable for property taxpayers.

House Study Bill 596 also creates a new residential property tax for everyone. No more picking categories of people. The exemption is 10% of taxable value up to $25,000. That is a big chunk of property that will not be taxed. The bill also revamps the outdated and confusing property tax statement everyone is mailed. The new statement will provide taxpayers with a better understanding of where their hard-earned money is going and what services they receive.

Additionally, the property tax reform bill creates a new FirstHome program modeled after Iowa’s very successful 529 education savings accounts. This will be a new way for Iowans to start saving early for their first home. Finally, House Study bill 596 creates a $10 million government efficiency grant program at Iowa State University. For long-lasting reform to happen, local governments need to do things differently and the goal of this program is to help them find efficiencies and savings.

House Study Bill 596 represents months of meetings and lots of listening to put together the best reform package possible for taxpayers not tax collectors. With this bill, property taxpayers would see more predictability and stability for generations.

The next Storm Lake Legislative forum will be held Saturday, March 28, at 12:30 p.m. at King’s Pointe Resort. Contact Megan Jones by email: megan.jones@legis.iowa.gov