Correcting state’s property tax reform law unlikely to happen this session

Iowa House Rep. Jon Dunwell told the Jasper County Board of Supervisors this week that although lawmakers are discussing ways to correct issues caused by House File 718 — a property tax reform law passed last year — he isn’t confident that there will be any action or relief this legislative session.

In an update with the county supervisors on March 19, Dunwell asked if any of them had questions for him regarding specific bills or issues. Supervisor Brandon Talsma asked Dunwell if there would be any corrections to alleviate the issues of House File 718, which he first thought would have minimal impact on the county.

Talsma previously told Newton News that House File 718 has complicated the county’s rural services levy. Typically, the county plays a balancing act with rural, general and general supplemental levies, which alters the levies year to year. Good fiscal management has provided the county with the luxury of wiggle room.

House File 718 has also affected city governments in Jasper County. Officials for both Newton and Baxter have spoken out against the bill as being too restrictive and for punishing even small amounts of growth. While the law does sunset in 2029, it has been a punishing setback for local governments setting budgets.

In response to Talsma’s question, Dunwell said the issues the law created are more related to distinguishing organic growth from assessment growth. Another issue is when governments have a net taxable valuation above 3 percent they must then use 2 percent of that growth to drop down the levy.

However, if local governments are below 3 percent growth, they can keep 100 percent of that. Which is why many leaders say the law discourages growth.

“The concept of using growth to drop the levy for taxpayers is a good idea, but the question is whether we should — at least in my mind — be allowed to keep the first 3 percent and then talk about a waterfall effect that happens after after that 3 percent is achieved,” Dunwell said.

He also mentioned the bill — which passed with near unanimous bipartisan support, apart from exactly one lawmaker who voted “no” — was created with a sunset in mind, meaning lawmakers were to come up with another plan to address property taxes before 2029.

“That was meant to say we have to do something and come up with a long-term plan. We’ll continue to work on it,” Dunwell said. “We’ve had some conversations with a couple of representatives. Right now the Senate has been leading that discussion and we need to get more in front of it in the House.”

DUNWELL GIVES MORE GENERAL UPDATE ON LEGISLATURE

Prior to his response about House File 718, Dunwell said education sucked the wind out of the Iowa Legislature this year after the governor unveiled her AEA bill. As a result, the House and Senate have belabored their own interpretations of the bill, which will require further negotiations between the two entities.

From Dunwell’s perspective, the House’s AEA bill that was sent to the Senate was essentially “gutted.” The House worked with the AEA leadership and superintendents to come up with a task force that would recommend long-term changes, and it also ensured special education stayed underneath AEA.

“It did lay out what could happen in subsequent years, but the task force would ultimately have input on what that would look like long-term,” Dunwell said. “It was something that was worked on very diligently with the AEAs. They know something has to be done once the conversation’s been started.”

For now, Dunwell said the Iowa Legislature is focusing on a number of education bills — which have made it past another funnel week — and the budget. The state is also looking at Medicaid reimbursement covering the costs for local pharmacies filling prescriptions.

“We typically allocated $1.2 million a year. They get so much per prescription for taking care of a Medicaid prescription, and that was not done last year. So they’re a year behind,” Dunwell said. “So I’m really trying to look at that … $1.2 million plus the extra $1.2 million — $2.4 million — as they go forward.”

As a member of the Judiciary Committee, Dunwell said another issue that has been brought up and will be addressed is pay for judges.

“It’s been a long-term, reoccurring issue,” Dunwell said. “Iowa kind of lags behind the rest. We’re trying to figure out how we can make sure we’re compensating our judges. It’s getting harder and harder to find judges, so we want to make sure we’re keeping pace with what the market has out there.”