Progress, frustration, and the road ahead on property tax reform
As the 2025 legislative session comes to a close, it’s fair to say this year had its share of frustration. The Iowa House got a lot done — passing bills, pushing for funding and fighting for our priorities. However, much of that momentum slowed in the Senate, and several key issues remain unresolved.
Still, there were some wins worth noting. Landowners may finally see progress on eminent domain protections if the governor signs the bill we sent to her desk. Local pharmacies could also benefit from much-needed Pharmacy Benefit Manager (PBM) reform, again pending the governor’s approval.
But the biggest disappointment? Property tax reform.
No matter what the radio talk show hosts and journalists tell you about how easy it is to accomplish, I assure you, it is not. Why? Let’s dive in.
Why Is Property Tax Reform So Hard?
At first glance, it may seem simple: lower taxes for homeowners. But the reality is far more complex. Iowa’s property tax system supports the very services residents rely on most — schools, public safety, roads, infrastructure and transit. Any meaningful reform must thread the needle between taxpayer relief and maintaining these vital services.
The real challenge is balancing competing demands. Taxpayers want lower bills. At the same time, they expect high-quality services in their communities. This tension creates a nearly impossible balance — especially when 150 legislators from every corner of the state agree we need reform but can’t agree on how to do it.
Local Government Dependence
Property taxes are the primary funding source for local governments. Reducing them without offering replacement funds could mean drastic service cuts. For example, Des Moines’ transit system, DART, has warned of up to 40% service reductions if certain reforms pass without alternative funding.
State vs. Local Authority
Legislation like House File 718 (2023), which capped levy rates, sparked resistance from local officials. They argue that state-imposed caps limit their ability to meet the needs of their communities.
Complex and Confusing System
Mechanisms like the “rollback” create disparities and unpredictability. Reforming or eliminating these elements could lead to unintended consequences unless carefully crafted.
Public Service vs. Taxpayer Relief
There’s widespread support for property tax cuts — until people see the services at risk. It’s a political Catch-22: help one group and another pays the price.
Equity and Economic Development
Aggressive property tax limits could disproportionately hurt lower-income areas and slow local development. Reforms must protect communities most in need.
Looking Ahead: SSB 1227 – A Real Path Forward
Despite the setbacks and gridlock, there is a promising proposal gaining traction: Senate Study Bill 1227 (SSB 1227). It didn’t pass this session, but it will likely be the foundation of reform efforts in 2026. It’s the bill Rep. Kaufmann and Sen. Dawson created based on our feedback from you all.
Key Provisions of SSB 1227:
Ends the “Rollback” System: Simplifies the tax structure by phasing out this outdated mechanism, allowing property taxes to reflect actual market value.
Revenue Caps with Flexibility: Limits local budget growth to 2%, with flexibility up to 5% during periods of high inflation (based on the Consumer Price Index).
Fairer Homestead Exemption: Replaces the original $50,000 exemption with a 25% exemption on assessed value (up to $125,000), benefiting both urban and rural Iowans.
Additional State Support for Schools: Adds $400 million annually in state funding to offset local revenue losses and protect school budgets.
Concerns Still Under Review
Impact on Local Services: There’s understandable concern that local governments will face funding constraints under the new caps.
Need for Transparency: Taxpayers deserve a system they can understand. The bill also seeks to clarify how taxes are calculated and where dollars are going.
Final Thoughts
As we close the book on this legislative session, I’m proud of the work House Republicans accomplished — even as we faced challenges in seeing all of our priorities cross the finish line. We remained focused on fiscal responsibility, individual liberty and protecting Iowa values, and we’ll carry that same commitment into the next session. While there’s still work to do — especially on tough issues like property tax reform — we’re not backing down; in fact, we are digging in during the interim to deliver property tax relief next session, better schools, stronger communities and greater government accountability.
Thank you for trusting me to be your voice at the Capitol. I’ll continue working to deliver real results for our district and for all Iowans.
It is a part-time legislature and now I turn my focus to my neglected profession (mural artist) and small business www.BubbaPaints.art. You can reach out during the interim but please understand we are all back working our jobs and enjoying time with family.
You can reach me at Ray.Sorensen@legis.iowa.gov
Our Liberties We Prize and our Rights We Will Maintain!