As Governor Kim Reynolds mulls SF634, the property tax limitation bill, there are many questions anyone would have to consider — questions that did not get an adequate hearing before the rush to passage of a backroom-built bill in the waning hours of the 2019 Iowa legislative session.
1) Why an arbitrary 2 percent limit on new tax revenues? No matter what increasing costs an individual community may face to provide public services, the bill limits growth in revenues to 2 percent.
2) Why penalize growth? No matter how much property valuation grows in good times, the revenue limits would restrict the public services needed to service a growing community.
3) Why penalize recovery from disaster? Reduced property value under tax levy limits will reduce revenue for critical public services in recovery.
4) Why take local tax decisions out of the hands of locally elected officials? It’s never easy for local officials to raise taxes — taxes they also pay — but the bill substitutes the arbitrary will of state legislators for the judgment of board and council members the voters choose to make local decisions.
5) Why hinder jobs, encouraging local cuts in public service jobs by putting special levies for employee benefits such as pensions under the new, artificial and arbitrary general revenue cap?
6) Why encourage a reduction of health benefits for local public service employees by putting those costs under an arbitrary revenue cap?
7) Why should a “no” vote count twice as much as a “yes” vote? That is the effect of the two-thirds super majority required to go above legislative mandated 2 percent revenue growth. Local officials would have to reach that threshold in many cases with actually more than two-thirds approval: four “yes” votes on a five-member board or council, five if there are seven members — and that is the case even if revenues exceeding 2 percent growth would mean a decrease in tax rates!
8) Why reward backroom deals in the name of transparency? There was no opportunity for a public debate on this deal hatched in the waning hours of the legislative session. There was no transparency in the process.
Be sure to see this Iowa Fiscal Partnership backgrounder by Peter Fisher of the Iowa Policy Project for more information about the actual property tax trends in the state — trends ignored by proponents of the legislation who offered a false narrative about this issue.
Also see this blog by Peter Fisher.