30-Second Summary:

To address rising property tax costs for Iowa homeowners, the Governor, House, and Senate have each released proposals aimed at reforming the state’s property tax system. While the plans differ in approach, all three share one key provision: a 2% annual cap on property tax revenue growth. Under this policy, cities and counties would be limited to increasing their total property tax revenue by no more than 2% per year, with some exceptions or additional growth allowances that differ within each plan.

Opponents of the proposal, including some local government advocates, argue that a 2% cap is unrealistic and would make it impossible for cities and counties to maintain essential services. Local officials in Davenport, Bettendorf and Scott County, for example, have claimed that a 2% cap would not keep pace with escalating bills for public safety employee wages, fire trucks, software services and insurance. 

However, these claims overlook an important reality: many local governments across Iowa are already operating within this constraint while continuing to provide services to their communities.

The City of Carroll offers one such example. Over the past decade, Carroll has kept property tax revenues in check while maintaining city services. “The City of Carroll is doing absolutely what everybody should be doing,” a city council member said. “We’re not an issue at all.” The council member added that the city should be able to comply with a 2% revenue cap unless an emergency occurs.

And Carroll is far from alone.

A review of fiscal year 2025 to fiscal year 2026 property tax data shows that 100 Iowa cities held their property tax revenue growth to 2% or less. Of those, 54 cities either kept revenues flat or reduced their property tax revenue year over year.

Counties show a similar pattern. Thirty-three of Iowa’s 99 counties limited property tax revenue growth to 2% or less, with 21 counties holding revenues steady or cutting property tax revenue altogether.

These figures demonstrate that a 2% property tax revenue cap is not an abstract theory or an unworkable restriction. It is standard that dozens of cities and counties across Iowa are already meeting, proving it can be done while continuing to serve residents responsibly.