Local government officials in Iowa warn property taxes on homes and farms will rise if a 150-million-dollar annual state payment to cities and counties ends. State lawmakers ordered a 10 percent cut in commercial property tax rates in 2013 and the state payments were promised back then to make up for lost local tax revenue. House Republicans have crafted a proposal to gradually eliminate those payments over the next four years. Lucas Beenken of the Iowa State Association of Counties says going from 150-million in state support to zero in five years will be a huge hit to local governments.
Robert Palmer of the Iowa League of Cities says while some urban and suburban areas have seen development and growth in property taxes, much of the state has not.
House Appropriations Chairman Pat Grassley says Republicans will consider all the input and the plan could be delayed a year. However, Grassley says legislators still need to act this year — even if the reduction in state support doesn’t start until July of 2020. Grassley says that would give local officials enough time to cut budgets or raise taxes to adjust to reduced state support.
