Season 2 - Episode 31: Property Tax

Property taxes.
School funding.
Local services.
State deficits.
Corporate taxes.
Rent.
Healthcare.

This episode of Deciding Iowa tackles one of the biggest — and most personal — issues of the 2026 legislative session.

Lawmakers say the new property tax package will provide relief for Iowans.
But where does that money come from?
And what could the long-term impacts be for schools, cities, counties, infrastructure, renters, and the future state budget?

In Episode 31, we break down:
➡️ What actually passed
➡️ Why both parties supported parts of it
➡️ What concerns remain
➡️ And why this issue is far more complicated than a campaign slogan

Whether you support the bill, oppose it, or are still trying to understand it, this conversation matters because these decisions affect every Iowa community.

🎥 Watch Episode 31 now: Property Tax

As always, we encourage you to stay informed, ask questions, and engage with your elected officials.

#DecidingIowa #IowaPolitics #PropertyTaxes #IowaLegislature #IowaPolicy

Transcript

SPEAKER_01 0:00

Hello, Bramber County and all of Iowa. I'm Dr. Sean Olibrook and I'm a cancer scientist, biochem professor, and House District 57 candidate.

SPEAKER_00 0:07

And I'm Dr. Emily Bavers. I'm a physician, mom of three, and a health advocate. So Sean, Cinny Day for the Iowa legislature occurred over the weekend. They carried 12 days over the 100 that are allocated and engaged in a 40-hour marathon to close on Sunday evening.

SPEAKER_01 0:25

You know, Emily, it's hard to think that straight and clearly without getting a little delirious without long a time. You know, a thing or two about being awake for long stretches doing your job as a OBGYN.

SPEAKER_00 0:37

Right.

SPEAKER_01 0:38

What do you think about how they wrapped it up?

SPEAKER_00 0:40

Well, you know, I would say it's not really the greatest for sound decision making to be awake for 40 hours and debating during that time. Um, not great for safety or just rational thinking, but alas, the Iowa legislature, gonna Iowa legislature. What else to say?

SPEAKER_01 0:58

You know, on that note, let's look at the headline issue from the legislative uh promise as far as this legislative session is uh you know involved, property tax reform. Right. You know, in the end, the legislature came together on a bill that passed after the we talked about hours of debate. Right. And it's important to note the bill had bipartisan support in the end in the Senate, and the bill does several things to provide tax relief. And importantly, the past property tax revision doesn't kick in until fiscal year 2027. So the legislature has some time to fix, possibly fix any mistakes.

SPEAKER_00 1:37

Yeah. Well, we don't one of the things it does is it raises the tax credit for elderly or disabled Iowans from $1,000 to $1,500. It also changes the homestead tax credit to an exception and raises the amount covered to adjust for inflation. So currently it's up to $20,000 or 10% of a home's taxable value. But rather than a reduction of that on the tax bill, it's a reduction on the taxable value of the home.

SPEAKER_01 2:08

Yeah, I mostly understand all that. One of the things that I mean for real, I I do, but it's like, come on. Yeah. It's one of those things where they they were like, oh, we're gonna make this property tax more understandable and simpler. That did not happen. So if there's one takeaway, it is as complicated as ever. Tax exemptions, tax credit, that's just a hard thing. So one of the things it does do is it changes the classification of multi-residential properties to be separate from residential properties. Now that's a key uh item for the Republicans. I wanted to see that happen. And then once that was separated, they can increase property tax rates for those multi-residential properties, you know, the apartments, to six percent over the coming three years. I I know we're both concerned this is gonna mean higher rents for renters.

SPEAKER_00 3:05

Right. It's it's punishing non-property owners, essentially. Yeah. Um, you know, importantly, and also curiously, it transfers some state assets from save funding meant to go toward school infrastructure projects to go toward property tax relief instead. Um as a person whose kids are in public school and cares deeply about public education. Ouch.

SPEAKER_01 3:30

Yeah, it it really makes it hard to do some of the infrastructure work we we want. Uh, you know, we count on save and Peppel to get a lot a lot of a lot of work done. You know, they they've they're running this billion-dollar deficit, and they're trying to figure out how they're gonna fund this property tax um revision. And honestly, it's like they're opening up coverage, just looking for places where they can grab any bits of money to try to pay for this. And you know what's suffering? It's gonna be the on the backs of the counties, and it's gonna be the public schools and the cities and the minute the municipalities and well, all of us with services. It's it's a terrible thing. Yeah, it you know, along the lines of education, it lowers the state uniform, well, it lowers the state's uniform levy on school foundation property tax from 5.4 per thousand to five dollars per thousand. And now that limits the funding of schools unless the state aid is backfills that. And they promise that they can backfill those things.

SPEAKER_00 4:27

But honestly, you know, it's a tough promise for a state running a billion-dollar deficit.

SPEAKER_01 4:33

So uh they and it's not like they haven't uh reneged on on promises in the past, the legislature. They they have. So the bill also caps local government revenue growth to 2% annually, though there are exceptions. And what did I say about complicated? Uh the exception list is involved, and uh going through it in the end, I'm still worried about counties and cities, municipalities having enough funds to being able to adjust their budget to meet the needs for public safety and some of the services that we all count on. Um, so there is a cost to this property tax savings that we're going to experience.

SPEAKER_00 5:11

Absolutely, there's a cost. You know, Sean, the bill is expected to save Iowans $350 million just next year in their property taxes.

SPEAKER_01 5:21

That's a big number.

SPEAKER_00 5:22

And over $4 billion over the next six years. And we've talked a lot about the financial picture in Iowa right now and in the future, and how the state has already begun moving money from the relief funds to vital programs that the state needs. How on earth will we make up for this loss in property tax revenue?

SPEAKER_01 5:43

Well, we we just mentioned some of these cuts, you know, moving money from save and uh limiting growth, um you know, regressive taxes are our thing. And when you talk about regressive taxes, you're thinking you're talking about fuel and save tax uh sales tax. Um when these taxes are paid by everyone, they are keenly felt the most by those who could least afford to pay, and that's the lower income Iowans. Uh so we're we're gonna see that as the state moves forward and tries to function and pay their their light bill, our light bill, uh we're gonna see, I think, more regressive taxes pop up, and we already have this this last legislative session.

SPEAKER_00 6:26

Well, and in addition to reducing the tax rate for property tax, the legislature has mounted a ballot constitutional amendment aiming to codify rules for both individual and corporate income tax rates in Iowa in the future.

SPEAKER_01 6:40

Right. And you know, this constitutional amendment, if if passed by Iowans uh this upcoming November, the result of that would mean that future uh legislatures will um will have to have a two-thirds majority in order to raise taxes. And, you know, that is going to be handcuffing as far as the ability of future legislators to deal with anything that Iowa has in front of them as far as uh budget balancing or the money to to run the programs that we all count on.

SPEAKER_00 7:14

It certainly would require bipartisan support, which has not been um something that's been very present.

SPEAKER_01 7:19

Yeah, exactly.

SPEAKER_00 7:20

It was pointed out by Representative Confers during the debate on this bill, Senate Joint Resolution 11, uh, which I will note happened during the 30th hour of this uh 40-hour session between Saturday to Sunday, that there's no similar limitation on other tax increases and no similar requirement to have a two-thirds majority for using money, for example, from like the taxpayer relief fund, which the legislature has been using to backfill other cuts and fund Iowan's vital programs.

SPEAKER_01 7:51

Okay. What are we gonna do, especially if that ballot measure passes? When the taxpayer relief fund runs out, our schools aren't funded, we can't pay for state health care, our hospitals are closing, and they are closing, our water is contaminated, we have work to do, and our government is too divided to increase the corporate increase the corporate tax rate. Instead of dealing with the deficit, they want to make it the new normal, having one. This amendment, if passed, will unnecessarily handcuff future legislators' ability to balance future budgets. What a mess.

SPEAKER_00 8:27

So true. Until next time, be well, Iowa.