Property taxes have become one of the few issues that unite voters across the political spectrum. The disagreement isn’t over whether there’s a problem, it’s over how to solve it.
That’s why a recent editorial from the Chicago Tribune caught our attention. We don’t typically look to the Tribune for insight on tax policy. But when an unexpected source reaches many of the same conclusions about property taxes that Iowa lawmakers acted upon, it’s worth paying attention.
The Tribune noted that high property taxes are not only a concern for citizens of Illinois but have become a significant issue across the Midwest. Most Iowans recognize that property tax reform was a central issue of our state’s legislative session this year. The Iowa Legislature debated three major property tax bills, and it took a lengthy period of negotiation before a good bill was passed.
The Tribune was right to lament that while neighboring states were considering various property tax relief measures, Illinois was doing the opposite. As the editorial pointed out, “much of this year’s property tax debate centered not on homeowners but on property tax ‘certainty’ for the Chicago Bears.” The Tribune raised this point because, whether it is property taxes or other forms of taxation, tax policy often drifts toward benefiting certain groups or special interests. In this case, it was the Bears’ demand for a new stadium.
Tax policy framed around special exemptions inevitably creates winners and losers. Targeted relief doesn’t eliminate the tax burden; it simply shifts it to someone else. Whether it is the Bears in Chicago, professional soccer in Des Moines, or other economic development incentives, special property tax treatment merely transfers the cost to other taxpayers.
When it comes to property taxes, it is easy to focus on singular deals that grab headlines. But the same principle applies beyond just large projects. Many states have considered special property tax exemptions, or even complete tax elimination, for senior citizens, and Iowa lawmakers considered doing the same this year.
Once lawmakers begin creating special exemptions, every group has a legitimate reason to ask why it was left out. Young homeowners, families with children, retirees, and small business owners all face rising property tax burdens in different ways. Retirees often argue that seniors deserve priority because they live on fixed incomes. But many working families and small business owners also live on incomes that are effectively fixed, making the distinction less clear than it first appears.
The question should not be which group deserves special treatment, but how to make property taxes more affordable for everyone. Broad-based relief addresses the underlying burden instead of asking one group of taxpayers to subsidize another.
The most effective way to accomplish that is to address the root cause of high property taxes: government spending.
In Iowa, Governor Kim Reynolds made this point clear. “So, this year, we need to go after the real driver of the problem: Spending. Spending is what drives taxes—always has, always will. And the most reliable way to protect taxpayers is to limit the growth of government itself,” stated Reynolds.
The Iowa Legislature seemingly took that message to heart when they passed a property tax reform measure that places a 2 percent cap on the amount of property tax revenue cities and counties can collect each year, subject to certain adjustments.
The Chicago Tribune editorial board was right to conclude that meaningful property tax reform should provide broad relief rather than carve-outs for favored groups. Iowa’s recent reforms reflect that same principle by focusing on limiting the growth of local government tax collections instead of shifting the burden from one taxpayer to another. Lasting property tax relief begins by controlling the spending that drives taxation.
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