Category: Counties

The True Cost of Property Taxes

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Many city, county, and school governments seem to disregard Iowans’ struggle to achieve when their only focus is more taxpayer money to spend on their special projects.

According to a recent WalletHub article, Iowa has one of the highest property tax burdens in the country. The 1.49 percent of their home’s value Iowans pay in property taxes yearly ranks as the 10th highest in the country.

Real-Life Impact

ITR recently heard about a woman’s journey trying to improve her life. She escaped her abusive husband, and after living in her car, under bridges with her three children, she ended up in a homeless shelter. With the shelter’s support, she got back on her feet and went back to school. She now has a degree in counseling and works full-time at the homeless shelter. Her kids are all good students, and her sons are now volunteer firefighters in the community. One of the things she is most proud of now is that she is a homeowner.

She worked hard to own a house but now is coming to grips with the property tax burden that comes with it. Her city, school, and county governments seem to disregard her struggle to achieve when their only focus is more taxpayer money to spend on their special projects.

The government needs to quit taking so much.

Property taxes were an unnecessary hurdle for her. Rent increases because landlords have no choice but to pass on that expense. Businesses struggle to afford leases because of tight profit margins. For homeowners, do they even own their own homes?

Think about your grocery bill, your gas bill, everything else. Expenses increase, and affordability decreases.

Paying 1.49 percent of your home value yearly for property taxes is simply too much. It needs to come down. Reducing our collective tax burden is better for us economically, but these things impact every Iowan at a fundamental level and change how people live their lives.

Property tax bills are determined right now.

Next year’s local government’s proposed budgets will soon be finalized. Many county supervisors have been lashing out at legislators and policies as simple as the assessment rollback. They point the finger at everyone but themselves because they have a tight budget and lose sight of the fact that Iowans don’t want to pay this much.

Local officials cannot see Iowans are overtaxed on their property taxes. Their entire paradigm is based on their local budget and what it means for them.

We’ve heard from many state legislators who are sick and tired of being lectured by city and county officials. The legislature gets it and knows how upset Iowans are because they go door to door and hear it from voters. Remember, last year’s property tax relief bill passed with only one dissenting vote.

Upset city councilmen and county supervisors try to blame and lecture those dastardly legislators of both parties who simply stood up for their citizens when their local government wouldn’t do it anymore.

The vast majority of these local governments are just flat wrong when complaining about cuts. Revenue was not cut; the legislature just limited their growth. Simply put:  Property tax revenue collected by cities and counties will continue to increase.

Only in government is slowing the growth of spending seen as a cut. Cal Thomas once said:

“It’s funny that government can never afford to cut taxes or spending, but taxpayers are never asked whether they can afford higher taxes.

When your city council, county board of supervisors, or school board chooses to increase spending and raise property taxes, they need to clearly explain why the government needs the money more than you do.

Take Action!

Use the menu at the top of this page to see how your community’s property taxes have grown compared to inflation, population, and school enrollment. Use this information to learn more about your local government budgets, share it with your neighbors, and start a conversation with your elected officials.

Keep an eye on your mailbox. Property tax public hearing notices will be mailed in March. ITR will keep you updated and provide information for you to share when you attend.

Property Tax Increases Take Center Stage on March 5th Special Election Ballots

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Some local governments say if you vote to renew a levy, taxes won’t go up.

But it’s like finishing paying for a car and then buying another with the same monthly payment. This hides the option of saving money instead!

The March 5, 2024, special election in 13 school districts and one county will put property tax increase questions before voters. The school districts are looking for increases in their physical plant and equipment levies (PPELs), which generate local property tax dollars for infrastructure and equipment repairs, and one district is also asking for an increase of its debt service levy (i.e., for bonds). Louisa County is asking voters for a 15-year tax increase to fund emergency medical services (EMS).

How Much Will Property Taxes Increase?

If these public measures were to pass, the total would increase next year’s property tax collections by $12.1 million. Even worse, these property tax increases are scheduled to last for 10 years or more. The total taxpayer commitment would be more than $137.4 million — and that is a conservative estimate because nobody can predict property valuation increases a decade from now.

The following table provides the details for each public measure.

What Is PPEL?

PPEL stands for “physical plant and equipment levy.” The Iowa Legislature created the tax in the early 1990s as a local funding stream to support school district facilities and equipment. One type of PPEL allows annual school board approval, while the other, including those listed above, requires public votes. Voted PPELs can be authorized for a maximum of 10 years and $1.34 per $1,000 of taxable value and are distinctive because school boards may issue bonds against them and repay the debt with interest from the revenue.

PPEL funds may only be used for maintenance projects and equipment. For the current fiscal year, 49 districts do not use this property tax levy, while 100 districts are at the maximum rate of $1.34. The statewide average tax rate is 81 cents, and it generates $206.7 million per year.

Not Telling the Whole Truth

Anytime government agencies hold a vote to increase spending or keep it the same, the burden on taxpayers increases because home values continue to go up year after year. Some districts are forthcoming about the effect on taxpayers and admit they are asking for more money; others use careful wording to convince voters the tax increase doesn’t exist.

One of the most common statements school districts will use is, “This will not cause an increase in the school district property tax rate.”

The claim is that the current tax rate includes a PPEL, and if voters agree to keep it the same, then taxes do not go up. The principle is similar to paying off a car only to run out to buy a new one at the same monthly payment. The continuing payments disguise the alternative: saving the money.

Another way to say the same thing points to a second misleading aspect, “The district believes this will not cause an increase in the school district property tax rate. This will extend the voter PPEL the district currently has for an additional 10 years. The district has had a voter PPEL since 1992.” Over time, keeping the rate the same produces inevitable increases as property values rise. Since 1992, Iowa residential property valuations have increased 274%, meaning the district has been effectively raising taxes for 30+ years.

Some districts go so far as to deploy scare tactics against voters like, “If the PPEL is not renewed, the district would need to use general fund or SAVE money to support building upkeep, transportation, and technology, delaying potential projects planned from SAVE funding.” Translation: the school would have to budget and spend money on its planned projects. State Secure an Advanced Vision for Education (SAVE) money is already earmarked for infrastructure purposes, so using it is not unreasonable.

Another common tactic is to claim, “The current PPEL rate is $0.67 per $1,000 of taxable property value. We are asking voters to consider raising that to $1.34. Despite the increase, the district is positioned financially to make changes that allow the district’s overall tax levy rate to remain flat, meaning an increase of the voted PPEL will not raise taxes.” Notice the details. The district is positioned to make changes, which doesn’t mean it will. Total spending will likely increase, meaning the burden on property owners will also increase.

Voter Resources

Click on your school or county in the table above or use the menu at the top of this page to visit your community's page to learn more about its property taxes and spending.

General Service and Rural Services Levy Rate Change

General Service and Rural Services Levy Rate Change

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The maps below show the change in the General Services (county-wide) and Rural Services (rural only) levy rates from FY 2023 to FY 2024. Blue counties increased rates, light green decreased rates, and gray counties had no change.

County Tax Relief Is Not Deprivation

County Tax Relief Is Not Deprivation

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Counties are cashing in on hefty property taxes from high assessments, and reducing rates won’t halt financial gains.

You might hear your county officials complaining they are facing dire straits this year because of the new property tax law. The truth is that too many counties have been cashing in on hefty property taxes from rapidly increasing assessments, and redirecting some of these financial gains toward rate reductions shouldn’t affect the services they offer.

Every county is supposed to be allowed a maximum general services property tax levy of $3.50 per $1,000 in valuation, with another $3.95 for the rural area of the county.[1] Over time, special provisions in state law have given counties ways to exceed those rates. To make the property tax structure easier to understand and more predictable for taxpayers, the new law consolidates some levies and requires counties gradually to reduce their top rate to the $3.50 and $3.95 maximums.

Counties Raised Their Rates

While the legislation was working its way through the system before being enacted in May 2023, county officials knew it would eventually become law. In their final budgets before implementation, many counties made changes to hedge against future cuts.

They certainly had room to do so. Iowa property valuations increased as much as 22% above the prior year in some areas, so counties have no need for increased levy rates, given these extraordinary assessment bumps. Many of them were already enjoying the advantages of rates above the supposed maximums.

In fiscal year 2023 (FY23), 30 counties charged more than the maximum general services rate of $3.50, and three of them were above $3.95 for rural services.

For FY24, the number above the maximum for general services jumped to 40 counties, with rural rates above the maximum in five counties. The statewide average general county services rate rose over the same period from $3.55 to $3.78. Growth of the average rural addition was from $3.18 for FY23 to $3.27 for FY24.

To put that into perspective, Decatur County has the highest general services rate, and it jumped 12 cents to $6.71 for FY24. On the rural side, Audubon has the highest rate, which increased another 2 cents, to $5.38 on top of the general services rate in that county. Even so, Audubon comes nowhere near the highest total rate. The combined basic rate (general services and rural) in Clarke County is $9.64 for FY24.

Another key statistic is the county with the largest increase over the one-year timeframe; Lee County raised its general services rate from $3.50 to $5.85, a $2.35 jump in one year, which was the largest in the state.

Keep in mind that counties impose other levies on taxpayers, too, pushing total tax rates even higher. The highest-taxed residents in the state at the county level are currently the rural residents of Winnebago, who pay $15.52 per $1,000 of property, all in.

How the Legislation Works

The recent legislation reduces property tax levies by requiring counties to apply new growth toward lowering their levy rates. If a county experiences growth in property valuations, it can no longer keep the entire windfall but must adjust its rates.

Triggers vary this requirement based on the non-TIF taxable valuation growth.[2] If a county’s non-TIF taxable growth is 3% or less, it can maintain its current levy rate and collect the increase. If a county’s non-TIF taxable valuation growth is between 3% and 6%, it must reduce its total property tax collections by 2% by adjusting its rate downward. If a county’s tax base grows at 6% or more, the mandatory reduction is 3%.

For simplicity, the following examples consider only the general services levy:

  1. County A has a general services levy rate of $3.50, and its non-TIF taxable valuations increase from $1.00 billion to $1.02 billion, which is up 2% year-over-year.
    a. The county can keep its tax rate and all property tax growth that year.
  2. County B has a general services levy rate of $4.50, and its non-TIF taxable valuations increase from $1.00 billion to $1.04 billion, which is up 4% year-over-year.
    a. The county is required to reduce its total tax dollars collected by 2% while keeping the rest of the increase.
  3. County C has a general services levy rate of $4.50, and its non-TIF taxable valuations increase from $1.00 billion to $1.07 billion, which is up 7% year-over-year.
    a. The county is required to reduce its total tax dollars collected by 3% while keeping the rest of the increase.

How Much in Savings?

From 2017 to 2023, county valuations went up an average of 4.3%. Every county saw its valuations grow by at least 3% during one of those years, and 70 saw valuations increase by more than 6%. In rural areas, the average growth across the state from 2017 to 2023 was 4.2%. Again, every county’s rural property values went up by at least 3% during one of those years, and 78 saw valuations increase by more than 6%.

The new county tax rate restrictions will lower property taxes statewide. Exactly how great an effect taxpayers see depends on how much the general and rural tax bases of each county grow from FY25 to FY28. The benefit will be most substantial in the 40 counties currently above $3.50 for general services and five counties currently above $3.95 for rural services, but any county with a big increase in property values will enjoy a tax reduction from what their taxes would otherwise have been.


 [1] Certain county property tax levies apply to all taxed property within the county; these are called general levies, while other levies apply only to property that is outside of incorporated cities, which are called rural levies. Properties located in cities are only subject to the general levies, while rural properties are subject to both general and rural levies.

[2] This refers to the taxable valuation growth outside of specially designated districts with tax increment financing (TIF) programs. 

November 7 Election Bond Questions Exceed $1.7 Billion

November 7 Election Bond Questions Exceed $1.7 Billion

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75 percent of Iowans will see a bond question on their November 7th ballot.

The November 7, 2023, election ballots in 50 Iowa counties will have bond questions that total $1.72 billion in potential new spending statewide. A majority of the state’s people, 75%, live in counties with bond referenda next month, and these residents face their local governments saddling them with new debt. In fact, some November 7 ballots will include additional questions related to property tax increases specifically tied to the proposed debt.

The bond questions cover all variety of local governments: Six are for counties; four are for cities; and the remaining 35 are for public school districts. The largest request is Polk County’s proposal to build a new terminal at the Des Moines International Airport for $350 million. The smallest is the City of State Center’s proposal to build a municipal fire station and emergency medical service (EMS) building for $1,500,000.

School Districts Asking for Bonds… Again

For some school districts, next month’s bond questions are their second this year. A March 7 election also included bond questions, and voters in the Durant Community School District (CSD), North Tama CSD, West Sioux CSD, and Clarinda CSD all said “no.” Nonetheless, these school districts have decided to bring the same questions up for a second-chance vote, some with more money added. In the case of the Irwin-Kirkman-Manilla-Manning (IKM-Manning) CSD, voters approved a bond in March, but the district is back asking for more money anyway, despite its declining enrollment.

Effect of a New Property Tax Law

Earlier this year, a wide-ranging package of property tax reforms passed through the Iowa State Capitol (HF 718) with overwhelming bipartisan support in both legislative chambers. One of the major provisions of the legislation is the restriction of bond elections to November each year. The intent was to increase voter turnout for issues that have a direct effect on property taxes.

Another new requirement in the legislation is direct notification about bond elections. The commissioner of elections or auditor for each county conducting a bond election must mail every registered voter a notice that includes the full text of the public measure to be voted on not less than 10 days or more than 20 days prior to election day.

Voter Education

To ensure efficient, accountable government, voters in these districts must educate themselves about public projects and spending in their communities. Public finance is difficult even for those who work in the public policy world, which is why Iowans for Tax Relief has revamped and expanded its ITR Local webpage with information to help you make an informed decision this November.

Visit itrlocal.org and explore your community’s spending, debt, and property tax collections.

County Per Capita Spending

County Per Capita Spending

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When your county supervisors create a budget and decide how much to spend, they also set the rate, which determines the county’s portion of your property taxes, which is the third largest part of your total bill behind school districts and cities.

School District Debt

School District Debt

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Debt can crowd out other priorities from the budget. A temporary increase for a good reason is understandable, but constant, high levels of debt put the taxpayer on the hook for more interest payments in the future. School districts should pay off debt in a timely manner without taking on additional burdens.

The map and table below show each district’s enrollment and a four-year history of debt per capita.

Click on a column heading to sort.

County Debt

County Debt

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Debt can crowd out other priorities from the budget. A temporary increase for a good reason is understandable, but constant, high levels of debt put the taxpayer on the hook for more interest payments in the future. County supervisors should pay off debt in a timely manner without taking on additional burdens.

The map and table below show each county’s population and a four-year history of debt per capita.

Click on a column heading to sort.

Iowa Government Debt Increase Largest in Nearly a Decade

Iowa Government Debt Increase Largest in Nearly a Decade

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At a time when property valuations are increasing and Iowans are struggling financially from inflation, local communities must focus on paying their debt off, not finding new spending projects.

Iowa governments took on nearly 7% more debt — almost $1.3 billion — in fiscal year 2022 (FY22). The current Outstanding Obligations Report from the state treasurer shows this to be the largest increase since FY14. Iowa’s state and local governments now collectively owe $20.2 billion, which is roughly $6,320 per resident.

Especially with interest rates rising, property taxpayers should be asking their local officials — from cities, counties, and school districts — whether this is the right time to increase debt spending. Local leaders often tout spending projects as paths to prosperity for their cities and school districts, but this is simply a political assertion. Debt costs money. As interest payments, bond ratings, attorney fees, and more pile up, a pay-as-you-go approach is preferable over taking on debt whenever possible.

Among all levels of Iowa government with outstanding debt, cities currently hold the most. In FY22, cities had $7.5 billion in outstanding debt obligations, requiring $663 million in annual debt-service payments, or 7.7% of total budgeted city expenses.

Breaking down the total outstanding debt statewide by purpose, more than half of FY22 debt went toward public buildings/schools (36%) and utilities/sewer systems (24%). Smaller amounts funded transportation, housing and urban development, health care, and public safety.

Another important way to assess government debt is by the types of debt that have been issued. General obligation (GO) bonds, which voters are accustomed to seeing on the ballot, are the most familiar. This type of debt is backed by the full faith and credit of the government responsible for the bond, which typically translates into the lowest interest rates because governments can always raise taxes to pay bondholders. By voting on and approving such debt, residents have agreed to take the risk upon themselves.

Another common type of government debt is the revenue bond. This type of debt is supported by a specific revenue source, such as income from a utility (water/sewer), enterprise revenue (landfills/ garbage facilities), or a local option sales tax. In theory, the issuing government body may not be responsible for the debt if the revenue doesn’t appear, so the interest is typically higher than for GO bonds. However, defaulting on such bonds can affect the government’s bond rating and make borrowing without voter approval more expensive in the future, so officials have incentive to make bondholders whole no matter what happens.

Overall, Iowa’s debt is 46% general obligation bonds, 50% revenue bonds, 3% loans, and 1% lease-purchase agreements.

Iowa’s state constitution limits the debt of each political subdivision to 5% of the value of the taxable property within it, but this limit only applies to debt payable from property taxes, typically GO bonds. Revenue bonds or other types of debt paid from sources other than property taxes have no legal limit.

To some extent, the higher-than-normal debt in FY22 can be attributed to a carryover from the pandemic and the federal stimulus money sent to local governments, which flooded cities, counties, and school districts with cash. The combination of surging cash and record low interest rates encouraged cities to pursue infrastructure projects and refinance previously held debt.

In the new high-interest-rate environment, these activities need to change. Debt places a burden on taxpayers and can crowd other priorities out of local budgets. At a time when property valuations are increasing and Iowans are struggling financially from inflation, local communities must focus on paying their debt off, not finding new spending projects. A temporary increase for a good reason is understandable, but constant high levels of debt put the taxpayer on the hook for growing interest payments in the future.

The following table shows the top cities, counties, and school districts across the state of Iowa when it comes to debt levels. If you are interested in digging into the debt held by your local governments, visit ITR Local and review the countycity, and school district debt pages.

© 2023 Iowans for Tax Relief and ITR Foundation