Op-Ed: A Proven Solution for Property Tax Relief | Iowa

“A lot of Iowans like me would like relief from high property taxes. We are all struggling with extremely high prices for food, gas, electricity, etc. How are we supposed to live and keep our homes? asked a concerned taxpayer. Iowa taxpayers are asking for relief from high property taxes. Taxpayers deserve a solution, and Iowa can learn from other states that have provided property tax relief.

It may come as a shock, but elected officials in more than 20 counties are not raising property taxes this year. That’s very good news. The bad news is that these counties are in Kansas, not Iowa.

Last year, Kansas lawmakers passed the Truth in Taxation Act, which requires elected officials to be honest about any property tax hike they impose. Each local entity’s mill tax is reduced each year, so new assessments bring in the same amount of property tax dollars. If local authorities want more tax revenue, they must notify ratepayers of their intention, hold a public hearing on the proposed increase, and then vote to create a public record.

Kansas elected officials can no longer pretend to toe the line on property taxes while reaping big gains from assessment increases. And now that they need to be honest about tax increases, many local Kansas officials have decided they don’t need to raise taxes this year.

The Kansas law also has a strong enforcement mechanism if local governments fail to comply. Any entity that does not comply with the law is not allowed to raise property taxes. If they did so before a court found them non-compliant, then that tax authority must refund the money or apply it to next year’s tax.

This year, the Iowa Legislature passed a landmark income tax reform measure that creates a flat personal income tax rate of 3.9% by 2026 and will gradually reduce the rate. corporation tax at 5.5%. Now, the Legislature would be wise to follow up on this important taxpayer victory by proposing a solution that will fix high property taxes. In 2019, the Legislature passed a property tax transparency and accountability measure, which included some elements of truth in taxation. tax reform.

A strong Truth in Taxation Act includes a direct notification requirement, ensuring that taxpayers receive notice informing them of the impact of a potential tax increase on their tax bill. It also has a revenue-neutral component where the tax authorities receive the same amount of revenue as the previous year and if they want to increase their budget, this will trigger a tax truth hearing, which will also force elected officials to vote by roll call. on the potential increase.

Some local government officials will most likely complain that direct notification will cost too much to send a letter to ratepayers regarding their intention to raise property taxes. First, cities and counties have no cost unless they choose to raise property taxes. If they do, they should be able to operate a bit more efficiently and use the savings to cover the low cost of tax truth. And isn’t it interesting that cost is of little concern for projects that cities and counties promote; “too expensive” is often the excuse for not doing something they don’t want to do.

But the real reason for their opposition may be the same as in Kansas: some local officials argue that taxpayers don’t understand what to do, and that they might not be able to raise taxes as much as they do. taxes if they were forced to be honest about property taxes. load increase.

Truth in Taxation is the benchmark for property tax relief. It has saved taxpayers in Utah and Tennessee hundreds of millions of dollars over the past 30 years, and it is now providing Kansas taxpayers with substantial tax relief during these uncertain economic times. This year, Kansas lawmakers made it even better. A state website will host everything in one place. Taxpayers can find the tax increase for each local entity in each county, and they will also be able to see if each elected official voted for or against the tax increase. Iowa can learn from both Utah and Kansas.

Take a look at your property tax notices to see how much your tax has gone up, then ask your elected officials if they will reduce the mill levy to offset the increase. Anything other than a firm “yes” means more hikes are on the way.

Tackling high property taxes takes real courage, but it’s the right thing to do. Ensuring truth in taxation is the best way to ease the long-term burden of property taxes.

John Hendrickson is director of policy at the Iowans for Tax Relief Foundation, Dave Trabert is CEO of the Kansas Policy Institute, and Jonathan Williams is chief economist and executive vice president of policy at the American Legislative Exchange Council.