Senate Republicans’ proposal to overhaul Iowa’s property tax system has advanced through a subcommittee on Tuesday.
The bill would cap city and county revenue growth between 2 and 5 percent, based on inflation. It would replace Iowa’s “rollback” system with a 50 percent homestead tax exemption up to $350,000, and make many other changes.
Dubuque Mayor Brad Cavanaugh said he likes that the bill would tie revenue caps to inflation, giving cities more flexibility to respond to rising costs. He says this would also simplify the property tax system and provide other ways for cities to raise revenue.
“Several aspects of this bill really indicate that you … have really genuinely listened to the concerns of city leaders that we brought to you and you’re working to strike this balance," Cavanaugh said.
But Cavanaugh says he’s concerned about the proposed elimination of property taxes for seniors who have paid off their mortgage.
While this measure passed out of committee, Republican leaders have yet to agree on a path forward for property tax relief.
Tyler Raygor with Americans for Prosperity says he’s opposed to the bill because it would also tie the gas tax to inflation.
Some groups expressed support for indexing the gas tax to inflation because that will help fund road construction.
