As legislators in Des Moines continue to debate which route proposed property tax reforms may take, District 6 Sen. Jason Schultz (R-Schleswig) is detailing the Senate’s plans. In a recent legislative newsletter, Schultz highlights that Iowa consistently ranks among the worst states in the nation for property tax burden and points to Senate Study Bill (SSB) 3001, which he describes as a philosophical shift in how the state views property taxes. Under the Senate’s proposal, homeowners age 60 or older who have paid off their mortgage would no longer pay property taxes on their home and up to a half-acre or less of land. Other homestead properties would see taxable valuations reduced to 50 percent, while the current rollback system would be eliminated. To offset that lost revenue, senators are proposing a limited increase in the state gas tax that is capped at one penny per year for no more than two consecutive years, along with allowing cities and counties to seek voter approval for a 50 percent increase in the local option sales tax, from one percent to 1.5 percent. Other voter-approved levies, such as physical plant and equipment levies (PPELs) for schools and other municipal capital projects, would still apply to all property owners, regardless of age. The Senate’s measure would also set a two-percent “soft cap” on most local government budget growth, with exceptions for expenses such as health benefits, pensions, and legal settlements, which are generally outside local elected officials’ control. Schultz says the Senate’s bill is based on the premise that somebody who fully owns their home should not have to worry about losing it. If the new property tax system is adopted, Schultz expects the age range to be lowered incrementally to apply to as many Iowans as possible.
