Jan. 2—Republican Iowa State Senator Tom Shipley, whose district includes a majority of Union County, said he wouldn’t be surprised if some measures approved last session are reviewed, and maybe revised, during the next state legislative session that begins Jan. 8.

“There may be some things tweaked,” Shipley said before the Christmas holiday. “I don’t think property taxes are done. Income taxes are not done.”

Voters and elected officials for municipalities will see the impact of a bill approved last year early on. As cities and counties begin research and writing their fiscal year 2025 budgets, they will have to consider House File 718.

The legislation caps levy rates for cities and counties. Cities will have a general fund levy, consolidated from 15 existing levies, capped at $8.10 per $1,000 in taxable value. Counties have a cap of $3.50 per $1,000 for general services and $3.95 for rural services. Local governments are placed into three tiers based on their revenue growth with different formulas to determine how much of the excess revenue must be dedicated to lowering property taxes, and the process for bringing existing property tax rates down to those set maximums.

These caps — as well as the new $6,500 homestead property tax exemption for Iowa seniors and $8,000 exemption for veterans — will mean Iowans pay a smaller share on the assessed value of their homes, farms or businesses in future years. As Iowa homeowners saw a 22% average growth in home value assessments this year, these measures will mean larger reductions in costs for taxpayers.

In essence, the bill limits the levy for counties and cities. If a taxing entity, like a county, needs to exceed those limits, it must ask the voters to approve. About one-third of Iowa’s 99 counties already exceed the limits. Some counties may have done that to ensure to have the tax revenue to pay all their expenses. The bill does not go into full effect until 2026, giving those municipalities that are over the amount years to incrementally lower the amount rather than a significant, one-time reduction.

“The counties and cities do have some concerns,” Shipley said. “There are a lot of people who are concerned about property taxes as they have gone up quite a bit. There is still some work to be done on that.”

Shipley said he and the other legislators have been watching the response to the school voucher bill also approved last year, early in the session. Of the four representatives of Union County, Shipley was the only one who voted no. Senator Amy Sinclair and Representatives Devon Wood and Ray Sorensen voted in favor.

According to Governor Reynold’s office, the bill makes state education funding available for K-12 students who choose to attend accredited private schools. It also provides public schools with additional categorical funding for students who live in their district but attend private schools, and allows public school districts to use unspent money from some categorical funds to supplement teacher salaries.

With the passage of the Students First Act, parents who enroll their eligible children in an accredited private school will receive an amount equal to the per pupil funds allocated by the state to all public school districts each year. The funds are estimated at $7,598 per pupil for the 2023-2024 school year and will be deposited into an education savings account (ESA) to be used for tuition, fees, and other qualified education expenses.

Funds are deposited into an education savings account (ESA) each year until students graduate or complete high school or turn 20 years of age. Remaining balances are returned to the state general fund.

“We will be watching how this develops,” Shipley said. “Since there was a bigger response than anticipated, there are always tweaks to be done. If there will be any tweaks, I don’t know. We have had a lot of discussion about education.”

Shipley said he has been asked by many of his constituents about issues related to Iowa that the state has no influence.

“I hope the Farm Bill gets settled,” he said about the federal program that includes crop insurance and food assistance. The bill was intended to be revised this year, but with debates over federal government funding, the bill was extended well into 2024. “Eighty percent of the bill is about food security, not food production,” he said. “Having an extension is better than nothing,” he said.

Iowa Capital Dispatch contributed to this story.