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TAX NEWS - 2010

Iowa Tax Relief: Iowa taxpayers will see property taxes increase

Once again, the State of Iowa's budget woes will be passed along in the form of tax increases to Iowa taxpayers. This week, the non-partisan Legislative Services Agency (LSA) released a draft review of the Iowa School District Funding for the budget year which begins on Thursday, July 1. The report shows property tax increases ahead for Iowa taxpayers, which could directly impact Iowans as early as this fall.

In Iowa, school funding is a combination of state funding as well as local property taxes. During the 2010 Legislative Session, Governor Culver and the Democratic-led Legislature approved the State Fiscal Year 2011 Budget, which did not fully fund the state support for school districts. The summary from the LSA confirms Iowa taxpayers will face a property tax increase due to the 2011 State Budget shifting some K-12 education funding from the state level to local property taxes.

Even though Iowa schools will see less state funding, the amount Iowa school districts are authorized to spend does not change. School districts are allowed to levy property taxes to fill the void left by the state.

The preliminary report estimates the total school district property tax amount for FY 2011 to increase by 7.3 percent from the previous fiscal year. The most significant increase is found with the Cash Reserve Levy, which is set to increase statewide by 53.9 percent compared to the previous fiscal year. The LSA review states this levy likely increased significantly due to the state funding reductions.

This report underscores yet another unfortunate consequence of Governor Culver and the Democratic-led Legislature using smoke and mirrors to balance the state budget; hardworking Iowa families will be faced with a sizeable property tax increase.
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