Wrong time for property tax bill

As of late Friday afternoon, only one organization – Common Good Iowa – had taken a position on the latest property tax bill to surface in the Legislature. CGI, which took a wait-and-see approach to the first bill, has registered opposed to SSB 1227 and HSB 328 – the new property tax bill proposed by the Ways and Means chairs.

The reason is simple: All Iowans need more time than is left in this session to understand all the implications of a major overhaul of the property tax system. This goes for county, city and school officials, for advocacy organizations who are focused on sustaining critical services provided by both state and local governments, for the media and the public generally, and for all 150 state legislators themselves. As public services are the sole reason we have taxes, these impacts must be fully understood.

While the legislation has changed, the bill has not addressed key concerns that we hoped would be corrected in the original bill:

• Shifting more school funding from local to state revenues means greater pressure on the state General Fund, which already is shrinking due to enormous income-tax cuts – with continued shortfalls projected and with the national economy in an uncertain environment.

• Residential property owners cannot necessarily count on reduced property taxes as the so-called “rollback” repeal – affecting the taxable value of property – disproportionately benefits business property compared to residential homeowners. For many homeowners, even the $50,000 homestead credit proposed in the new bill would not fully offset the rollback change. Commercial and industrial property owners already have received substantial breaks in recent years while homeowners have not.

• There is no fiscal note or other official, independent fiscal analysis being provided by the Legislature’s own experts. Legislators need this information to properly consider any proposal of this scope at the subcommittee and committee level.

We are closing in on the middle of April with projected adjournment in three weeks. That is not nearly enough time for a deliberative and comprehensive approach to getting this legislation right – or close to it – the first time. Legislative leaders have acknowledged there is no rush, so they should slow the train. Iowa lawmakers should continue drawing perspectives from across the state, through the interim between the 2025 and 2026 sessions. Hearings should be scheduled in several cities around the state so that residents and their locally elected leaders can be heard. There is plenty of time to get this right, but not this spring.

Anne Discher is executive director of Common Good Iowa.