Property Tax Implementation Committee

Subcommittee # 2 – Broad Implementation Issues


Minutes from meeting of December 19, 2003

The second meeting of subcommittee # 2 (Broad Implementation Issues) was called to order by Representative Jim Kurtenbach at 10:00 a.m. at the Ames City Hall. Subcommittee members present were Jim Kurtenbach, Ted Tedesco, Herman Quirmbach, Larry Sigel, Mary Maloney, Curtis Rouse, Randy Bauer, and Tom Jarrett. Twenty-two others were also in attendance.

Following introduction of the subcommittee members, Larry Sigel presented an educational program on school finance in Iowa. A number of questions were asked and Larry addressed them all.

A number of items were discussed as possible interim solutions to property tax issues. Among these were:

  1. Capitalization rate change for agricultural land. If the rate is lowered, more value would result.
  2. Freeze the roll-back on residential property at 2002 level.
  3. Change the levy limits on taxing entities. Current limits include $3.50 (per $1000) and $3.95 for county general and rural; $5.40 for schools; $8.10 for cities.
  4. Address spending or budget limitations.
  5. Do nothing.

A motion was made by Ted Tedesco, seconded by Herman Quirmbach, that this subcommittee recommend to the full committee to recommend the legislature to freeze the residential rollback at 51.3% (2002 level) and the agricultural capitalization rate be set at 6%. After discussion, the motion was amended to include only the residential rollback adjustment.

There was some discussion by subcommittee members as to whether they had enough information to vote on such an issue. The motion was defeated by a 4-3 vote with one abstention.

Some questions that need to be addressed in researching the residential rollback are:
1. How will it affect an average household?
2. What will be the resulting change to the relative mix (burden shift) of property tax dollars?
3. What will be the effect of uncoupling residential and agricultural values?

The next subcommittee meeting date was not set. The full Property Tax Implementation Committee will likely be meeting the first week the legislature is in session (January 12-16, 2004).