Deceiving the taxpayer
How state legislators use their power to distort reality
Iowa’s 99 counties are spending your money to mislead you about property taxes. But don’t blame the people at your county courthouse. The Iowa Legislature is forcing them do it.
Over the past week, Iowans across the state received taxpayer-funded mailings that distorted the reality of property taxes in this state.
Last week, I got my state-mandated property tax notice from the Scott County auditor, and it informed me that if a $100,000 home went up 10% in assessed value, the taxes imposed by my county for this fall and next spring would rise 12.3%.
But my property value didn’t go up 10% last year. It didn’t change. I’m sure this is the same for most people. Why? Because 2024 wasn’t a reassessment year. These occur in odd-numbered years. The local assessor’s offices in this county have said only a small percentage of parcels (about 10-15%) were updated last spring. Many of those that did see changes were due to new construction.
In other words, the 10% scenario described in the mailing isn’t based in reality.
Yet, Scott County taxpayers are being forced to spend thousands of dollars to spread this fairy tale.
The county budget office says the mailing cost $50,000. (After this post was published, the county auditor emailed me to say the cost was $40,474).
Iowa legislators mandated these notices as part of a larger tax bill they approved a couple years ago.
At the time, they said they were trying to increase transparency. And to be fair, there is some useful information in these mailings, such as tax rates and the dates of public hearings.
However, the part purporting to describe individual tax bills for later this year and early next—the part people will be most interested in—is bunk.
The notices say the 10% jump in property value is hypothetical, but according to local governments, this notice will inevitably lead to angry phone calls from people who mistakenly believe they’re in for a bigger tax bill.
I should note that this year, 2025, is a new reassessment year for the property taxes to be paid in 2026 and 2027, and it is possible people are now seeing some noticeable increases in their assessed values. I did. I’m told Davenport notices are expected to go out in the next week or so, and that residential assessments are up 8.9% overall. However, like in 2023, the residential rollback the state applies this fall will blunt most of the impact when it comes to taxable values, which is what are used to calculate the actual taxes we pay.
The rollback, by law, ensures the statewide residential taxable value does not grow by more than 3%.
Yes, I know this can all be pretty confusing, but it might be instructive to know that in 2023, even after the big assessment shock we got that spring, the rollback applied by the state meant about 62% of parcels in Davenport actually experienced a decline in taxable values, and only 12% of parcels saw an increase in taxable value of 10% or more, according to my analysis of city data.
Anyway, back to the misleading notice.
In a presentation a few weeks ago before the Polk County Board of Supervisors, a local budget official explained that rather than the 11.4% increase the mailing misleadingly describes to taxpayers there, the increase in county taxes will be just 1.3% for urban taxpayers who saw no change in their assessed property value. And that increase, they say, is only happening because of a small change in the residential rollback approved last fall by the state that will slightly affect taxable values.
Yet, Polk County officials said the state told them they could not include their own information in these notices to provide taxpayers the correct figures. Instead, county officials are being forced to mail the misleading information. And pay for it, too. With your tax money.
It’s much the same story in Scott County. The county has put a statement on its website pointing out the increase in net taxable value county-wide for 2024 was 2.1%. Individuals will see varying results, but the point is this: The vast majority of homeowners did not see a 10% increase in their property values. And they will not see double-digit increases in the taxes they pay this fall and next spring.
That’s the reality. But what also is reality is most taxpayers tend not to pay attention to anybody’s property values but their own. So, when the state can force local governments to send an official notice to taxpayers suggesting a double-digit tax increase may be in the works, even if it’s for somebody else, it is much easier to get Iowans to believe property taxes are out of control.
This, of course, isn’t happening in a vacuum.
Members of the state Legislature, mostly those in the Republican majority, and local government officials have been arguing for years about whether the locals are wisely using property tax dollars.
This is a fair argument to have. I think both sides have made some good points. But when lawmakers can use the power of the state to force local governments to mail a deceptive notice to taxpayers that distorts reality, then something has gone very wrong.
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Way to go Ed. This sham has been going on for years -- state legislators crusading for "property tax relief," while, at the same time, I don't know how many times I've heard county and city officials complain about "unfunded mandates" being put upon local governments.
This property tax notice is another-- and just the tip of the iceberg.
Also, maybe something has changed since I stopped covering local government on a daily basis seven or eight years ago, but to my knowledge the state has never ever fully funded military and homestead exemptions for local taxpayers to make whole local governments. And I suspect the state never will.
By the same token, I heard at least one local official in a community which extensively uses tax increment financing, in which taxes are diverted to finance site improvements, as a "gimme" for local business recruitment and expansion constantly complain about the state-established rollback. If I wanted to be semi flippant I could suggest that official was mad because he couldn't tax people enough -- yet still able to maintain a health fund balance year to year.
The whole system of property taxation is one big shell game, with a lot of finger pointing and a lot of folks in authority pretending they're doing something for you. Local governments can brag about freezing tax rates while raking in more money from increases in valuation, and they say oh, that's not us, we don't set your values, that's the state and the county assessor. Then the state and the assessors say, oh, we don't set your tax rates, that's up to the local governments. Individual local governments say, oh, we cities are only one part of your tax bill, you need to complain to the county, the school district and your community college too. And on and on.
The bottom line is if any tax levying body is asking for more money from property taxpayers than they did the year before, that's a tax increase.
And part of the state's answer is to clamp down on special levies that were already approved by voters at referendum, where people vote to tax themselves for certain projects -- like the levy which supports the museum where I am employed. So much for local control.
It'd be interesting to see how many of our state lawmakers ever served in local government and had to prepare a city, county or school budget. Maybe that's why they procrastinate on the state budget until the very end of the session each year, preoccupying themselves with social issues.
Nowadays they seem more preoccupied with where someone goes to the bathroom (oh, for a good old fashioned debate on mourning doves). Telling people how to live their lives is a lot easier than complicated stuff like budget, money, numbers and junk like that.
Good point. But why is this notice out now? Perhaps because the legislature is currently considering more "tweaks" to property taxes and want homeowners to be on board. That rollback that kept your bill lower: on the chopping block. Stop funding schools with local property taxes: Don't worry the state will take over to fund it. Oh, we've heard this story before. And so on.