House Study Bill 500, an act relating to state and local government finances by increasing the regular program foundation base percentage, establishing a property tax exemption for commercial and industrial property and establishing property tax levy limits for cities and counties went through two thorough subcommittees over the last week.
The bill increases the regular foundation base percentage from 87.5 percent to 100 percent over seven years. This would provide tax relief to all classes, while simplifying education funding. With the state picking up 100 percent of the regular foundation base, the need for the Property Tax Equity Relief would end.
The bill also establishes a property tax exemption for property that is improved with permanent construction. The phase in period would be 14 years, with all businesses in year 14 paying taxes on 60 percent of their taxable value. The House plan starts at the bottom and works up, with small business seeing the most benefits early, while larger businesses would see the biggest benefits in year 14. Additionally in year one, 100 percent of businesses would see some relief.
The House Republicans’ plan removes the property tax levy rate limitations for cities and counties and moves them to a property tax limitation expenditure amount that would be tied to an annual growth factor tied to inflation, plus new growth. Over the last 10 years, property taxes for cities and counties have grown over 60 percent, while wages for Iowa families have grown at 46 percent. This is unsustainable, and local governments need to align their spending with the hardworking taxpayers who pay for these services.
House Republicans are committed to giving the hardworking taxpayers of Iowa more of their hard-earned money back. House Republicans will deliver significant relief and genuine reform to all classes of Iowa’s property tax payers.
Linda Miller is the State Representative for Iowa House District 82
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