LEE COUNTY – Lee County officials are reacting to a bill that has passed out of the Iowa Legislature capping general fund levies for counties at $3.50, and cities at $8.10.
The bill is set to be signed into law by Iowa Gov. Kim Reynolds on Thursday at 2:30 p.m. at the Capital Rotunda in Des Moines.
Lee County Supervisors on Monday passed a budget that included a general services levy of $5.85/$1,000, a full $2.35 above the state cap.
The bill will also cap assessments and create three ranges of growth capacity regulation with counties that show revenue increases of 3% or less, 3% - 6%, and more than 6%. Local governments that experience those growth rates will have to use some of the excess revenue to further reduce property taxes.
For cities, the bill consolidates 15 individual tax levies into a general services levy for that city, which is capped at $8.10 per $1,000 in taxable value.
The bill passed on Tuesday provides an additional $6,500 homestead property tax exemption for Iowans 65 and older, while doubling a property tax exemption for veterans to $4,000 in taxable value.
Several local officials were still working through the new law when it was announced it was passed out of the legislature and was headed to Reynolds. The senate approved the bill 49-0 and the House approved it 94-1, both on Tuesday.
Peggy Steffensmeier, Fort Madison’s Finance Director, said she still had to read through the bill and the League of Cities’ recommendations and worksheets.
“I believe it still allows us to have a .27 emergency tax levy. That would give cities an allowable levy of 8.37 instead of 8.10,” she said.
But she said she had to spend some time with the new law to get the full impact to the city.
Lee County Supervisors were strongly opposed to the new bill as it worked through the legislature and were disappointed in the bipartisan action.
Supervisor Garry Seyb said he too hadn’t had a chance to read through the 70-page bill, but said he thinks it will have a serious impact on the county budget next year.
“My understanding is it wont take effect until the fiscal year 2025 budget. I’ll have to work through it and see what’s in it,” Seyb said.
“This has the potential to cap the levy and cap the assessed values. It will have a serious impact on how all counties are going to be able to do business.”
Seyb, a Republican, said a bigger concern is the effect on home rule and that ability of supervisors and leaders at the local level to be able to function.
“In the end, I have no doubt, if it does place a cap on levies and assessed values, it will likely have a negative impact on services,” Seyb said.
Seyb was also advocating, and hoping, for an amendment to this or another bill, that would have allowed Lee County to shutter one of its county courthouses.
“Unless that amendment gets added, we can’t address the courthouse situation. I really wanted to see the ability for us to address that at the county level,” he said.
“I had reached out to both (State Sen. Reichman and State Rep. Martin Graber) to make sure that gets passed. That amendment would have allowed the county supervisors to address some unfunded expenditures that we are up against here.”
But he said his biggest concern going forward, aside from pressing budget issues, is that the bill was moved to the Governor’s office without any discussion with County Supervisors across the state.
Lee County Supervisor Tom Schulz, also a Republican, went a step further and called the new legislation a “frontal assault” on the principal of localized versus central control.
“I am very disappointed in the direction that the legislature chose to go. There were some methods available that could’ve given reasonable property tax relief without grossly inhibiting the counties' ability to provide the services that so many residents depend on,” Schulz wrote in an email to Pen City Current Wednesday morning.
“This is a long bill and it’s going to take a lot of analysis, but my first take on it is that we’re going to have to see significant reductions in the services offered by the county.
“As I said, there are some things in the bill that will need further study, but my first instinct is this is not good, even though the intentions may have been.”
Schulz said he was “terribly disappointed” in those members of the local legislative group that supported the bill in its present form.
“It truly amounts to a full frontal assault on the principal of localized versus central control,” Schulz added.
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