Your Dollars, Not Their Rates

It’s the dollars those governments are pulling from you each year that matter.

When it comes to property taxes, don’t get fooled by smoke and mirrors.  A citizen should focus on how many dollars local governments are taking from them.  That’s it.  Don’t take the bait that some officials will dangle in front of you in the form of property tax rates. The property tax rates charged by your city council, county board, and school district are only part of an equation.  It’s the dollars those governments are pulling from you each year that matter.

In fact, you may be surprised at what ITR Foundation’s research unearthed.  We examined ten different Iowa communities (five on each side of the rate spectrum) and the property tax burdens of their city, county and school district,.  Among the communities with the highest rates charged, the property tax dollars paid per capita were substantially less than in the communities with lower rates. Property taxes are not about the rate, they’re about how much you pay.  And that’s an entirely different story.

We took our research a step further and reviewed property taxes levied by Iowa’s five largest cities.  Once again, the highest rate did not equal the heaviest burden. In fact, among those cities the lowest rate that was levied (Iowa City) collected the most property tax dollars per capita. And the highest rate that was levied (Davenport) had only the third-highest per capita property tax collections.

Now don’t get us wrong.  When everything else is equal, lower rates are obviously better than higher rates.  But among the 1,000 cities, 300 school districts, and 99 counties of Iowa, everything else is NEVER equal.  That’s why property tax discussions shouldn’t focus on rates, geography, income levels, or anything else.  Property taxes are painful for all Iowans and the impact they have on the budgets of households and businesses is what we should be talking about.  Right now, local governments are finalizing new budgets and holding public hearings for their citizens; taxpayers need to show up and speak up.  Local officials need to know how their budget plans will impact your budget plans.  After all, there is only one reason for property tax increases: local government spending.

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