Cities scramble to weigh in on new property tax la

A property tax reform bill pushed through the Iowa legislature had city and county staff and elected officials on the edge of their seats last week, concerned about potential restraints on their future budgets.

Senate File 634 was introduced and approved by the Ways and Means Committee on Thursday, April 18 and, as originally conceived, would have set a cap on how much a city or county could increase their budgets in a fiscal year. The original wording of the bill included a two percent "soft cap" on the annual revenue growth for cities, with the potential of levying an additional one percent by referendum.

Capping allowable growth would potentially put cities and counties in a tough position, particularly cities that don't have enough new construction to keep up with rising costs. As costs continue to rise, the upkeep of current equipment and staff may exceed the revenue public entities would be allowed to bring in under the proposed law.

"We would be looking at cuts," said Hampton city manager Ron Dunt.

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