The Iowa Senate

State of Iowa

Eighty-First General Assembly

STATEHOUSE

Des Moines, Iowa 50319

For Immediate Release Contact: Kimberly Steenhoek

Tuesday, Feb. 7, 2006 (515) 281-6571

Senate Republicans Introduce Property Tax Relief and Accountability

Legislation Aims to Make Iowa More Competitive for Business Growth & Job Creation

DES MOINES – Senate Republicans today rolled out a package of relief initiatives aimed at making Iowa’s property tax system more competitive for business growth and job creation, and more accountable to taxpayers.

The legislation would link the major classes of property so that the assessed value of commercial and industrial properties would no longer increase at a greater rate than residential and agricultural properties. The bill limits assessment increases for these properties to the lowest percentage valuation increase specified by law, or 4 percent if lower.

“Iowa’s current property tax structure leaves businesses shouldering an inordinate proportion of the tax burden. It puts our state at a competitive disadvantage when trying to attract businesses to locate here,” said Senate Republican Leader Stewart Iverson (R-Clarion). “This legislation will make the system more equitable and narrow the gap between classes of property.”

According to the Iowa Taxpayers Association, Iowa has the third highest commercial property tax rate in the nation and the twelfth highest industrial property tax rate.

The bill also would hold local governments more accountable to property taxpayers by requiring local officials to take a separate vote when raising property taxes.

“Local officials will argue they’ve kept property taxes steady when, in reality, they voted for a budget that increased assessments, resulting in higher property taxes,” said Sen. Jeff Angelo (R-Creston), co-chair of the Senate Appropriations Committee. “Requiring a separate vote on property tax increases will help ensure more accountability at the local level.”

The legislation also specifies that in periods of revenue shortfalls, local governments must first reduce funding for nonessential services.

“Property taxes fund everything from soccer fields to aquatic parks to public safety,” said Sen. Mark Zieman (R-Postville), co-chair of the Senate Ways and Means Committee. “When budgets are tight for cities and counties, they should look to other areas of their budgets before cutting public safety.”

Additional measures in the legislation include lowering the number of signatures necessary to protest an adopted county budget and eliminating county compensation boards so that county supervisors have to vote on their own salaries.

As a follow-up to this bill, Republican senators said they will file legislation offering incentives to schools and local governments to share services and find efficiencies.

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