Guest column | Chris Ingstad

Iowans have long despised property taxes, and they won’t be warming to them anytime soon. Local governments are collectively increasing their property tax revenues by more than six percent as cities (+6.6%), counties (+7.6%) and school districts (+5.4%) across Iowa kicked off a new fiscal year in July. Since most Iowans probably can’t expect a six percent increase next year, elected officials have decided to increase local government budgets faster than the budgets of the families and businesses that will foot the bill. Clearly, government spending is leading to higher property tax bills.

It doesn’t have to be that way for taxpayers. Iowa’s legislature should implement a strict 2 percent cap on annual growth in local governments’ property tax revenues. Unlike other solutions discussed in recent years, this approach would avoid undermining the market’s role in determining property values ​​or giving advantages to one group of taxpayers at the expense of another. Local governments in Iowa must be fiscally disciplined. Both New York and Texas have successfully implemented hard caps on local property tax growth despite their policy differences.

The ITR Foundation released a study showing year-over-year property tax growth for every city, county and school district in the state. A 2 percent cap would have saved Iowans $250 million this year alone. Not only would a 2 percent cap provide real savings, but it’s a solution that Iowans of all political stripes can rally behind. Polls released last month show that 70% of Iowa voters support this taxpayer protection, including strong majorities of Republicans, Democrats and independents.

One of the things that has put Iowa in this situation is that some local officials cite “growth” as the reason for the rapid increase in their spending. To test the growth argument, our foundation’s research also measured property tax increases in light of population (and enrollment) changes and calculated the per capita change for each county. Dallas County in central Iowa, for example, is increasing its property tax revenues by 27% in the new fiscal year. Even for Iowa’s fastest-growing county, that still represents a 23% per-resident property tax increase; growth alone does not seem to justify tax increases for so many Iowans.

A 2 percent cap would still allow for reasonable budget increases. If additional spending is necessary, the cap could be exceeded, but only with voter approval. This requirement ensures that any proposed spending increases are thoroughly justified to the public, promoting transparency and accountability. By implementing such a cap, Iowa can ensure a balanced approach to property tax growth, promote fiscal responsibility, and maintain fair and predictable taxation for all residents.

Local governments should not rely on Iowa’s legislature to subsidize their spending. Using state revenues for property tax relief has failed time and time again. Iowa introduced income and sales taxes in 1934 to provide property tax relief, but 90 years later, Iowa’s property tax system is still one of the worst in the country.

The rapid increase in property taxes across Iowa is unsustainable. Limiting the annual growth of local governments’ property tax revenues to 2 percent is a practical solution that resonates with voters. This limit would not only curb excessive property tax growth, but also better align local government budgets with the financial realities of Iowa families and businesses. Iowa has an opportunity to protect its taxpayers from steep tax increases, promote accountability, and create a fairer, more predictable property tax system for all Iowans.

Chris Ingstad is president of the West Des Moines-based Iowans for Tax Relief Foundation.

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