"My assessment increased $50,000. I’m sure my county board will just sit on their hands and let higher valuations increase the flow of tax dollars to their coffers." This comment was sent to us by an ITR member yesterday.
You might understand where she is coming from. Property owners received, or will soon receive, their new assessments. For most Iowans, their home's valuation has probably gone up. In Polk County, for instance, residential assessments have increased 7.5 percent and commercial valuation grew 9.2 percent.
Who controls your property tax bill?
There is much anger directed at county assessors, but they do NOT determine your bill. In fact, your tax bill can decrease even when your property's value increases. But that rarely occurs because local government spending always seems to grow.
Assessments are updated every two years, and the values are one part used to calculate property tax bills. However, members of your city council, the county board of supervisors, and school boards have the most impact on your final bill when they set their budgets.
It's their spending that creates your tax bill.
Some local governments are doing a good job holding the line on spending. Others are riding the wave of increased assessments. As we heard this year, many local elected officials proudly said property tax rates are staying the same or not increasing. Property tax bills continue to grow when the tax rate doesn't change because local elected officials don't want to make hard decisions. It's what one of our members described as "sitting on their hands."
What happened to property tax transparency?
The property tax transparency reform passed two years ago requires public notice and an extra hearing if a taxing authority's budget is two percent greater than the previous year’s budget.
While this was a significant step forward, the problem is too few Iowans have taken advantage of this new process to voice their concerns.
Most Iowans do not follow their local governments’ meeting agendas and are unaware of the budget process. They may not know when or where they may voice opposition to a property tax increase.
ITR is working on new tools to make this easier. Look for more info soon.
Back to your property's assessment. What can you do?
If you think your property's assessment is unreasonable, you can file a protest to appeal the value. But, don't wait. Protests must be filed between April 2 and April 30.
In response to the Biden administration's overreach, Governor Kim Reynolds has joined a coalition of 13 states in a lawsuit to protect our state's ability to cut taxes.
The lawsuit seeks a court order to strike down a provision of the $1.9 trillion American Rescue Plan Act that prohibits states from using federal aid "to either directly or indirectly offset a reduction" in net tax revenue.
"We believe it is an unconstitutional exercise of federal power," Governor Reynolds said on the Simon Conway Show. "I want the triggers removed. I want to keep reducing taxes on Iowans. I want to ensure the historic tax cuts we passed in 2018 are going to go into effect in 2023. On top of that, we are in a position to continue to cut taxes. We are not going to stop. We can't have the federal government telling us no. I don't see them saying we can't raise taxes, but they are certainly trying to tell states that have done a great job they can't cut taxes. It's just ridiculous."
This is what leadership looks like.
The lawsuit specifically addresses Iowa's revenue level and growth triggers, eliminating the inheritance tax, and child tax credits.
As we shared last week, Iowa lawmakers understand our state's needs much better than 435 Members of Congress and 100 Senators. By nature, our lawmakers are much closer to the interests and concerns of the individual citizen. In short: Iowans know what is best for Iowans.
We are glad to have a Governor that fights for taxpayers.
Forced Sale of a Century Farm
Death and taxes may be the only two certainties in life. The problem in Iowa is that our state combines those two certainties in the form of a tax bill for heirs in certain situations.
Spouses, children, and parents are excluded from the inheritance tax. Nieces and nephews, siblings, and business partners all have to pay up. If the person who receives the assets doesn't have cash on hand to pay the tax, difficult decisions have to be made.
Audrey from Polk City shared the story of her family farm:
"My twin brother and I inherited equal portions of our parents’ farm, which has been in the family since my great grandparents emigrated from the Netherlands and settled in Iowa.
My brother has been farming this land for over 40 years, and he intends to leave his portion of the land to his children, who also help on the farm. I don’t have any children and will leave what I own of the family farm to my brother’s kids as well.
My niece and nephews won’t have to pay any taxes on the portion of the land they receive from their father, but they will have to pay a hefty inheritance tax upon receipt of the land I leave them. This could result in the forced sale of a portion of this century farm.
Discrimination is when one is treated differently and worse than someone else for certain reasons. Because I am without children, Iowa directly discriminates against me compared to those who have children.
This is contrary to Iowa’s claim of supporting family farms and wanting to help young farmers.
Iowa is one of only six states that impose an inheritance tax. Legislators need to eliminate the inheritance death tax."
The government shouldn’t tax some people but not others in the same circumstance.
Occupational Licensing Reform SF 487 - Passed Senate 30-17 March 17; Passed House State Gov't Committee Wednesday SF 354 - Passed Senate 48-0 February 17; Passed House State Gov't Committee March 24
Taxpayer-Funded Lobbyist Transparency HF 822 (HF 346) - Passed House 91-3 Monday; Passed Senate State Gov't Committee Wednesday
Income and Property Tax Reform SF 587 - Passed Senate Ways and Means March 25; Passed Senate Appropriations Thursday
No Change This Week:
Income Tax Reform and Eliminate Inheritance Tax SF 576 - Passed Senate 46-0 March 17; Sent to House
Governor's Tax Reform Bill HSB 174 - Assigned to a subcommittee SSB 1145 - Assigned to a subcommittee
Donor Privacy HF 309 (HSB 28) - Passed House 84-9 February 23; Passed Senate Judiciary Committee March 24
Eliminate Iowa's Inheritance Tax SSB 1026 / HF 48- Passed Senate subcommittee / Assigned to House subcommittee SF 16 - Assigned to a subcommittee
Deductibility of PPP Loan Forgiveness SF 364 - Passed Senate 49-0; Passed House with amendments 94-0; Sent back to Senate March 4 HSB 195 - Passed subcommittee SSB 1198 - Assigned to a subcommittee SF 196 - Assigned to a subcommittee
Open Records Request Costs HF 786 (HF 637) - Passed House State Government committee
Additional Property Tax and Income Surtax- ITR Opposes SF 258 (SF 117) - Passed subcommittee
Dead for This Year
Public Assistance Program Eligibility Verification SF 389 - Passed Senate 30-18 February 23; Referred to a House subcommittee, but sub was never held
