The average property tax increase for the 75 counties affected by valuation-based restrictions was still 7.6%.
After the passage of a property tax reform law in 2023 (HF718), many local elected officials complained that the restrictions on property tax revenue growth limited their ability to provide for their residents. With some time having passed, available data show exactly how many counties were affected by the change and how much they budgeted to increase their property tax collections.
Out of Iowa’s 99 counties, the revenue restrictions affected 75 counties in the current fiscal year. Because of nuances in how the law was written- and what revenue growth was restricted and what revenue growth remained unchecked– the average property tax increase for the 75 counties affected by valuation-based restrictions was still 7.6%. The remaining 24 counties not affected by the new legislation increased their property tax revenue by 6.8%.
In fact, the ITR Foundation county property tax pain index makes clear that 91 counties increased their property tax revenue on a per-person basis since last year. No matter how you measure it, Iowans are paying more in property taxes this year, even with the legislative restrictions.
The value of every county’s taxable property, commonly referred to as the tax base, changes from year to year when new assessments and other factors are taken into account. If the total tax base increases, the amount of revenue collected increases, too, when rates are left unchanged. The 2023 tax reform law limited the amount of property taxes local governments can collect based solely on their growth, as it attempted to take property tax increases off of autopilot.
A county experiencing a significant increase in property valuations or assessments was, in theory, no longer going to be able to keep the entire windfall. To achieve this, the law created three categories for the property tax restriction:
For the counties with assessment growth below 3%, there were no rate restrictions implemented. Only counties with growth between 3-6%, or growth above 6%, experienced property tax restrictions. The map below shows the valuation growth tier of each county for the current budget year that determined which revenue growth restriction was applied as a result of the 2023 law. Valuations increased between 3–6% in 30 counties, and by more than 6% in 45 counties, with the remaining 24 counties each experiencing less than 3% growth.
Many local elected officials are still trying to understand the mechanics of the current property tax system, what levies they can utilize for various functions, and even the intricate details of their own budgets. Many of them simply rely on staff members to do the work during budget time and then approve those spending plans without much pushback. Iowans should find it frightening that so many locally elected officials who are able to directly impact their property tax bills are themselves still grappling with government budgets and how property taxes truly work.
While all but six counties increased their property tax collections, the weight of property taxes gets even heavier when one realizes city councilors and school board members delivered more expensive property tax bills this year, too. Even in the wake of the property tax restrictions, local governments increased property tax collections by more than 6% overall, as cities (+6.6%), counties (+7.6%), and school districts (+5.4%) combined to sweep in more than $7 billion in property taxes for fiscal year 2025.
Instead of fearing potential property tax limitations, local government officials should focus on thoroughly examining their budgets. Every local government budget contains non-essential spending that can and should be scrutinized. It’s time for officials to separate wants from needs and make the tough decisions to say “no” to non-essential projects and services. Just as taxpayers must tighten their belts and prioritize necessities, so too must local governments. Iowans elected their officials to be responsible stewards of their hard-earned tax dollars, and that responsibility includes making difficult but necessary choices to manage resources wisely.
Note: to see the details of your county’s limitations, visit the Local Government Property Valuation System and select your county from the ‘budget search’ option. Under the property tax section, the general basic fund levy calculation shows the taxable growth (valuation) percentage and the limitation percentage. Property tax data is found under the property taxes levied column. Our data are rounded to the tenth of a percent.
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