Iowa House passes property tax reform bill

DES MOINES, Iowa (Gray Media Iowa State Capitol Bureau) - The Iowa House of Representatives passed a Republican-sponsored property tax reform bill Wednesday, but its fate in the Senate remains uncertain.

The legislation, which passed 64-23, would limit local communities to collecting no more than 2% in additional property tax revenues each year. Homeowners would not pay property taxes on the first $15,000 of their home’s assessed valuation.

The House plan does not raise the gas tax like a previous Senate proposal, provide specific relief for seniors or change rates on multi-residential buildings.

House Republicans spent the day in meetings to reach a compromise within their party before the vote. The bill now faces negotiations with the Senate and Gov. Kim Reynolds.

House Democrats attempted to add a provision that would have given homeowners a $1,000 rebate and renters $500 this year. That amendment would have also capped increases to property tax rates at 4%. House Republicans did not include those provisions in the legislation.

Democratic Rep. Ken Croken of Davenport said the 2% cap poses risks to essential services.

“The two percent cap definitely poses a risk to police, fire and other services that are all funded by the general fund,” Croken said.

Republican Rep. Carter Nordman of Panora said the bill holds local governments accountable by limiting their spending.

Senate Republicans previously proposed an increase to the state gas tax to provide revenue to local governments for roads and bridges. That provision is not in the House bill, but Nordman said it could still be part of final agreements before lawmakers adjourn.

“I would like our property tax bill to remain property tax focused,” Nordman said. “If there’s other conversations, again a little above my pay grade with the speaker and leadership and governor, talking about those things outside of the property tax bill I think that’s a part of the discussions ongoing.”

Senate Majority Leader Mike Klimesh said in a statement after the vote that he is optimistic lawmakers can work on a compromise to pass property tax reform.

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Isabella Warren covers state government and politics for Gray Media-owned stations in Iowa. Email her at isabella.warren@kcrg.com; and follow her on Facebook at Isabella Warren TV on X/Twitter@isabellaw_gray, and on Instagram@IsabellaWarrenTV.