High property taxes are a major concern for Iowans. Over the past 20 years, property taxes have grown close to 110%, which far outpaces the growth of population and inflation. Gov. Kim Reynolds has stated that this will be a priority for her in the 2026 session after the legislature failed to pass a reform measure. Iowa’s property tax dilemma can be solved by the leadership of Gov. Reynolds, who has already demonstrated what is needed to provide relief to taxpayers.
The difficult truth is that Iowa’s property tax dilemma is a direct cause of uncontrolled government spending.
Local governments continue to increase their property tax collections, which means they increase their spending. From fiscal 2024 to fiscal 2025, Iowa’s counties are increasing their property tax collections by more than 7%, cities more than 6%, and school districts more than 5%. This means that taxpayers will pay more than $7 billion in property taxes to fund local governments.
With growing frustration, many taxpayers are asking why past reforms did not provide tax relief. The reason recent reforms have failed to provide tax relief is that they did not address spending. Going forward, the next property tax reform measure must address local government spending.
During her Condition of the State address, Reynolds launched Iowa’s DOGE task force, which is based on her successful state government reform and reorganization endeavors.
These efforts have already led to saving taxpayers over $217 million. This has also made state government more efficient by reducing the number of cabinet level agencies from 37 to 16, consolidating or eliminating boards and commissions, and streamlining bureaucracy. This also includes eliminating 1,200 regulations with the governor’s review on regulations.
“When we started our alignment work in 2022, state operations hadn’t been reviewed in 40 years – and it showed. Layers of bureaucracy had accumulated over decades, expanding government beyond its core function, keeping us from working effectively as one team, and hampering our service to Iowans. We were too big, too fractured, and too inefficient,” stated Reynolds.
The objective of the DOGE task force is to “continue reducing the cost of government, maximizing the return on taxpayer investment, and leveraging new technology at all levels – federal, state, and local.” A major part of the task force will be to consider ideas that will result in property tax relief.
Terry Lutz, who is a member of the task force and chairs the return on taxpayer investment subcommittee, described the issue as the “elephant in the room.” The task force is placing their “focus on streamlining local government to ease the property tax burden.”
“We do not intend to nibble around the edges. We hope to make bold recommendations to move the needle of efficiency in our government. The way our government delivers services,” stated Lutz. Further, he correctly notes that they “are looking for ways to reduce the tax burden without shifting the cost to other taxes or fees.”
Solving Iowa’s property tax problem will not be possible unless local government spending is addressed. Gov. Reynolds has already demonstrated what needs to be done at the state level. Conservative budgeting, along with reforming and limiting government, this is the formula that resulted in Iowa’s historic income tax reform. Without following this formula, Iowa’s income tax reforms would not have been possible.
Iowa Sen. Jason Schultz has offered a rule that should guide every serious conversation about tax reform: “Tax policy is affected by spending. And when you start seeing spending creeping up… you can’t have good tax policy.”
The “elephant in the room” is government spending. This is why property tax reform is so difficult. Only by limiting spending will taxpayers finally see property tax relief.
John Hendrickson is policy director for Iowans for Tax Relief Foundation
This article was originally published at www.thecentersquare.com
