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Governor Culver Signs Iowa Property Tax Relief Legislation

Last week, Iowa Governor Chet Culver signed three bills sent to him by the 2010 Iowa Legislature. The governor says these three pieces of legislation are designed to protect Iowa taxpayers and maximize state financial aid for schools.

House File 2030 requires school districts to use their cash reserves before increasing local property taxes to cover budget shortfalls. The measure prevents school districts from shifting the burden to property taxpayers if the districts have plenty of money in reserves not designated for other purposes.

Senate Files 2045 and 2046, which Culver also signed into law, delay until next session the legislature's decision on how much it will increase state aid for school districts for the 2011-2012 school year. The increase in state funding for schools is known as allowable growth. "Delaying the decision gives the economy time to improve, allowing for positive growth in funding during the 2011 legislative session," says Culver.

Farm Bureau: Bill highlights Iowa's need for true budget reform

The Iowa Farm Bureau put out a press release shortly after Culver signed these bills into law. The IFBF says House file 2030 bill which Culver signed highlights the need for true state budget reform by the Iowa Legislature and the governor—to protect property tax payers.

"While House File 2030 may delay property tax increases in some districts, it will not address the shortfall in state aid caused by Iowa's across-the-board budget cuts, which will result in higher property taxes," according to the IFBF.

"Until Iowa enacts real budget reform and gets a handle on state spending, our government will continue to balance the state budget on the backs of property tax payers," says Craig Lang, president of IFBF and a dairy farmer from Brooklyn, Iowa. "Reform is necessary for a long-term stable and predictable budget." 

Action the Iowa legislature needs take in 2010 on state budget

To improve the state's budgeting process, the Iowa Farm Bureau is asking decision makers to establish an affordable state budget that will:

1) Fund Iowa priorities and lessen the potential shifts in property taxes;

2) Ensure that the state's emergency funds are at a level sufficient to protect priorities when revenues are declining;

3) Create fiscal responsibility by not using one-time resources to fund on-going expenditures; and

4) Protect property tax payers when across-the-board cuts are enacted.

While all property owners will see increased taxes as a result of the state's across-the-board cuts, some will feel the pain immediately. Preliminary data from fiscal year 2009 shows that 133 school districts in the state will not be able to cover the void left by Iowa's 10% across-the-board budget cut late last year. Those 133 districts face $115 million in possible property tax increases, according to an analysis by the IFBF.

In a related move, the state legislature has decided to postpone setting allowable growth for 2012 until next year. "The legislature's decision to wait until next year to set allowable growth for 2012 makes sense, given the uncertainty surrounding the budget process and today's economy," says Lang.