Governor Kim Reynolds has signed a bill into law that legislators say is the hallmark of their 2026 session — the move to limit future property tax increases. A small group of legislators and Reynolds gathered in the Iowa Capitol’s Rotunda Monday for the bill signing ceremony.
Reynolds says the status quo was unacceptable.
Starting July 1st of 2027, there will be a general two percent cap on property tax revenue growth for cities and counties. The law provides a new homestead exemption worth up to 20-thousand dollars on a primary residence. The plan is designed to funnel more state funding to public school districts, which will lower property taxes statewide by 175 million dollars for all property owners. Officials estimate the total package will reduce property taxes by over four billion dollars over the next six years. Senate Republican Leader Mike Klimesh of Spillville says Republicans promised to take action and they did.
House Speaker Pat Grassley of New Hartford says the goal was to provide certainty to taxpayers.
Representative Carter Nordman, a Republican from Dallas Center, is chairman of the House Ways and Means Committee.
The bill cleared the Iowa Senate on the last day of the 2026 legislative session with bipartisan support. Only one Democrat opposed it. It easily passed the House as well, but 22 Democrats voted against it. House Democratic Leader Brian Meyer – who voted no – says it will be a while before Iowans notice the impact on their property tax bills.
Meyer says it’s not clear how essential services like police and fire departments will be maintained with a general two percent limit on future property tax revenue growth.
Meyer says he’s hearing concerns from developers, as well as local government officials, about the new limitations on taxing districts cities and counties set up to lure new business and housing developments and pay for new infrastructure like roads and sewers.
story courtesy of Radio Iowa; photo courtesy of Governor Reynolds’ Office/FB