Des Moines, Iowa (RI) — Governor Kim Reynolds has signed a bill into law that legislators say is the hallmark of their 2026 session — the move to limit future property tax increases.
A small group of legislators joined Reynolds in the Iowa Capitol’s Rotunda Monday for a bill-signing ceremony.
Reynolds says the status quo was unacceptable.
Starting July 1st of 2027, cities and counties will face a general 2% cap on property-tax revenue growth. The law also provides a new homestead exemption worth up to $20,000 on a primary residence.
The plan funnels more state funding to public schools, which lawmakers say will lower property taxes statewide by $175 million for all property owners. Officials estimate the total package will cut property taxes by over $4 billion over the next six years.
Senate Republican Leader Mike Klimesh of Spillville says Republicans promised to take action, and they did.
House Speaker Pat Grassley of New Hartford says the goal was to provide certainty to taxpayers.
Senator Dan Dawson, a Republican from Council Bluffs who leads the Senate Ways and Means Committee, says several interest groups tried to kill the bill.
Representative Carter Nordman, chair of the House Ways and Means Committee, says the plan represents long-term reform.
The bill cleared the Iowa Senate on the last day of the 2026 legislative session with bipartisan support — only one Democrat voted no. It also passed the House easily, though 22 Democrats voted against it.
House Democratic Leader Brian Meyer, who voted no against the bill, says the impact will take time.
Meyer says it’s not clear how essential services like police and fire departments will be maintained with a general 2% limit on future property-tax revenue growth.
Meyer says developers and local officials are concerned the new limits will restrict the taxing districts cities and counties use to attract new businesses and housing, as well as to pay for infrastructure such as roads and sewers.
KIWA Staff Photo
