Earlier this year, Governor Kim Reynolds and the Iowa Legislature passed the largest tax relief measure in the state’s history. The historic tax reform will replace the progressive income tax with a flat 3.90 percent rate by 2026. Iowa’s corporate tax rate will also gradually phase down until it reaches a flat 5.50 percent. Starting next year, the reform will repeal all state taxes on retirement income.
ITR Foundation President Chris Ingstad and Policy Director John Hendrickson joined the ITR Live podcast to discuss the ongoing efforts in Iowa to cut taxes, specifically regarding the skyrocketing property tax burden.
Property taxes are despised. Believe me, I and my organization hear from Iowans of all political stripes about the giant bite property taxes take from family budgets. Now inflation is adding pressure by pushing up the price of gas and groceries, not to mention rising real estate assessments and tax bills.
ITR Foundation President Chris Ingstad and Research Director Sarah Curry joined the ITR Live podcast to talk about what Indianola property taxpayers are facing and why local governments believe they need so much money.
Why do local governments believe they need so much of your money? In recent years, Iowa property valuations have increased considerably. Large valuation increases usually translate into increased revenue for local governments in the form of property taxes. Given the impact of inflation, we can expect this trend to continue. It will be interesting to see how Iowans manage to bear a growing property tax burden while paying more for gas, groceries, and everything else.
After looking at real estate in Utah, an Iowa couple was shocked at Utah’s low property taxes and declared, “Iowa should do whatever Utah is doing!” They are correct. Iowa should fix its broken property tax system with the solution that has worked in Utah for almost four decades: Truth-in-Taxation.
Do you ever get together with friends and instead of socializing about normal topics, you get thrown into a conversation about taxes? Well, that is exactly what happened to me the other day. Admittedly, having spent most of my career in public policy, it happens to me a lot. This time, however, I wasn’t the one who started it.
Iowa has a long history with property taxes and it is one of the most debated issues, even dating back to before statehood. The very first Legislative Assembly of the Territory of Iowa met in 1838 in Burlington, and one of their primary goals was to develop a revenue system. A few short months later the Iowa Territory created a property tax for residents, levied and collected by the counties – a function which the county still performs to this day.
How’s your property tax bill? If you tell us it’s too high, we won’t argue with you. In fact, we keep proposing solutions to deliver stronger taxpayer protections. But property taxes exist to fund our K-12 education system and city and county governments, as well as other services we all have access to; they are never going away. So maybe […]
Maybe you missed it, but April 3-9 was Affordable Housing Week in Iowa, where one of the main takeaways was that Iowa needs to increase its housing supply. It’s no secret that many states, including Iowa, have a housing shortage. Housing advocacy groups have identified a particular shortage of affordable homes, especially for lower-income Iowa families. In fact, it is such a pressing need that the State has designated $330 million over a five-year period to help aid in the issue.
With inflation and rising interest rates, it’s normal to worry about the national debt and what that means for our country. But what about Iowa and our local communities?
During the last few years, the state of Iowa tightened its belt and has reduced its overall debt burden. However, the combined total of state and local government debt increased by 5.3% to $18.8 billion in FY2021, the highest percentage increase in a decade.
March Madness wrapped up last week with the Kansas Jayhawks being crowned National Champions. While there may not be many Iowans who joined Jayhawk fans in celebrating that victory, there was another win in Kansas that we can all be happy about: property taxes. The map above identifies 21 Kansas counties that actually experienced a decline in property taxes this year.
Before examining what caused the big win in Kansas (the property taxes, not the basketball), we should reflect on the property tax situation in our state. Iowans are demanding property tax relief and nobody can blame them. Even before inflation reached record highs, putting a major squeeze on household budgets, Iowans felt the pain of having a heavier property tax burden than 40 other states.
Most citizens expect the property taxes paid to their city to be used for road maintenance, snow removal, building maintenance, and of course, public safety. These activities are all considered core government services and functions. However, in current times we see some of our city governments spending considerable dollars on things that could be better managed by the private sector – and that’s a problem.
This year may be one of the most historic for states lowering income tax rates across the nation. So far, at least six other states have joined Iowa in passing tax cuts, while many more have tax reform legislation under consideration. The graph above illustrates the new rates that will be delivered to individual taxpayers in their respective states. The […]
For several years we have praised North Carolina for its historic tax reform. The Tarheel State is the gold standard for prudent state tax policy that pairs conservative budgeting with shrinking tax rates. Governor Kim Reynolds and Iowa’s legislature have followed a similar path to deliver pro-growth tax reform by balancing restrained spending growth with income tax cuts. Years of prudent budgeting enabled the passage of historic tax reform this year, which will create a flat 3.9 percent income tax rate by 2026.
Reports that the Iowa Legislature eliminated the retirement income tax so that there would be enough people around to call the Bingo numbers have proven to be false. Okay, while that thought may have never actually crossed anyone’s mind, our elected officials were certainly thinking about how to keep retirees in our state when they eliminated Iowa’s tax on retirement […]
Many people have been probably told by either a parent, grandparent, or even a teacher that “honesty is the best policy.” This rule should also apply to local governments. Taxpayers across the country are demanding answers on why local policymakers cannot deliver property tax relief. In response, a growing number of states are enacting strong Truth-in-Taxation laws that force local […]
Nothing says “overreach” like one government forcing another to spend $1 billion, but of course that’s the situation Iowa’s local governments find themselves in. As we’ve written about, cities, counties, and school districts in Iowa have collectively received nearly $1.2 billion dollars from Uncle Sam through the American Rescue Plan Act (ARPA) and there are lots of ways to utilize […]
When major legislation is passed -and make no mistake, Iowa’s tax reform package is as major as it gets- it’s natural for one to wonder, “What does this mean for me?” We will answer that question for at least a few of the aspects of House File 2317. While these explanations are not meant to be exhaustive, nor do they […]
Yesterday the Iowa legislature passed a historic tax reform measure. Going into the 2022 legislative session Governor Kim Reynolds and the Republican-led legislature made tax reform a priority. The tax relief bill passed by both chambers phases in a 3.9 percent flat rate for individual income tax by 2026, a major reduction from today’s top marginal rate of 8.53 percent. […]
Tax rates matter. Whether it is allowing individuals to keep more of their hard-earned income or creating a more competitive economic climate, tax rates have a significant impact on a state. States are in economic competition with each other for both businesses and people. It is important for Iowa not to become complacent as numerous states are looking at reducing […]
From a taxpayer perspective, the 2022 legislative session is off to a good start. Governor Kim Reynolds, in her Condition of the State address, outlined a pro-growth tax reform plan that calls for a flat 4 percent income tax by 2026. House Republicans have also introduced a tax reform plan that calls for a flat 4 percent tax rate by […]
A state’s tax code is a tricky thing. No two states have identical laws governing their tax systems, so a direct, apples-to-apples comparison between states is impossible. There are lots of details and the details really matter. For instance, what is the standard deduction allowed by a state? This varies across the country, and becomes a key aspect of the tax plan released by Governor Kim Reynolds last week. But a good starting point for a review of all 50 state tax codes is the top marginal tax rate. Stated simply, the top marginal tax rate is the highest rate any given state levies on the income of its citizens and businesses.
By John Hendrickson, Policy Director for ITR Foundation, and Jonathan Williams, Executive Vice President for policy and Chief Economist at the American Legislative Exchange Council. Governor Kim Reynolds and free-market legislators are working to make Iowa a pro-growth leader. Tax reform is a priority for 2022 – and rightly so. Even after successful tax reforms in recent years, more […]
In Iowa, we expect to receive quality public services at a reasonable cost.
However, in too many school districts, cities, and counties there is a gap between the amount of property taxes extracted from citizens and the growth of the community. For example, one Iowa school district is collecting 90 percent more in property taxes than it did 10 years ago while the number of students has remained the same.
What is going on? Why is this happening? It happens for different reasons in each locality across the state, but the heart of the problem is a failure to talk with local elected officials.
So, if you are upset about your property taxes, select your community below to take a look at the growth gap between property taxes and enrollment/population. Use our built-in email form to easily start a conversation with the people who determine your property tax bill.