Our work continues on solutions to provide serious and meaningful property tax relief. Property tax reform has been a decade-long problem that previous legislatures have not been able to solve. Instead of being “dug in” on a single means of tax relief, our goal should be to have an open and honest dialogue about a variety of workable options.
One of the options currently being discussed is changing the current school aid formula, so that the state picks up a larger portion of school funding, with less of a burden falling on property taxpayers. House File 2 is a simple and modest starting point, squarely aimed at reducing all Iowans’ property taxes.
Under this plan, property taxpayers will be held harmless any time in the future when the state sets an allowable growth rate for K-12 per pupil funding. The amount that property taxpayers contribute to school aid would remain fixed going forward at a levy of $5.40 per $1,000 in taxable value.
With this proposal, the share of school funding that is put on the backs of Iowa property taxpayers would be reduced, while continuing to fully fund our K-12 educational system. On average, this would save Iowa taxpayers $2.70 per $1,000 in property valuation, totaling an estimated $412 million statewide, once fully implemented.
Other ideas have been floated which involve new tax credits, which come with a recurring need for annual appropriations by future legislatures. Unfortunately, the legislature’s track record on funding property tax credits is less than stellar. This new plan for increased state funding would be permanent, predictable and significant, with no shift in tax obligation between classes of property.
This is an idea worth pursing, and we will continue to look for any other solutions which can provide meaningful, predictable tax relief, while also maintaining our commitment to fully fund the priority needs of Iowans.
Tags: House File 2, property tax relief, Property Taxes, school aid