Governor Kim Reynolds has signed a bill into law that GOP legislators say is the hallmark of the 2026 session — the move to limit future property tax increases.
A small group of legislators and Reynolds gathered in the Iowa Capitol’s Rotunda today for a bill signing ceremony. “Most importantly we want to say thank you to the people of Iowa: the families, farmers, small business owners, seniors, and aspiring homeowners who spoke up at every roundtable and made the need for change undeniable,” Reynold said.
The governor has repeatedly described the status quo as unacceptable. “Over the last two years alone, property taxes have increased over 10%, faster than inflation, faster than population growth and faster than Iowans’ paychecks,” Reynolds said. “That’s not only unacceptable, but it’s unsustainable.”
Starting July 1, 2027, there will be a general 2% cap on property tax revenue growth for cities and counties. That cap will not apply to payments on debt, liability insurance or employee benefit increases.
The law provides a new homestead exemption worth up to $20,000 on a primary residence. The plan is designed to funnel more state funding to public school districts, which will lower property taxes statewide by $175 million for all property owners. Officials estimate the total package will reduce property taxes by over $4 billion over the next six years.
Senate Majority Leader Mike Klimesh of Spillville said Republicans promised to take action and they did. “This bill signing today represents years of hard work, difficult discussions, and tough decisions,” Klimesh said.
House Speaker Pat Grassley of New Hartford said the goal was to provide certainty to taxpayers. “Politicians say one thing, they don’t do it, they’re unable to keep those promises,” Grassley said, “but I think what you’re seeing here today is a unified Republican Party that was able to get something done.”
Senator Dan Dawson, a Republican from Council Bluffs who leads the Senate Ways and Means Committee, said a number of interest groups tried to kill the bill. “But today, we say the family home comes first.” Representative Carter Nordman, a Republican from Dallas Center who’s chairman of the House Ways and Means Committee, was the other lawmaker to speak during the brief ceremony. “This is not a Band-Aid. This is not a short term solution,” Nordman said. “This is real reform that is going to deliver real results for Iowans across the state.”
The bill cleared the Iowa Senate on the last day of the 2026 legislative session with bipartisan support. Only one Senate Democrat opposed it. It easily passed the House as well, but 22 Democrats voted against it. House Minority Leader Brian Meyer, a Democrat from Des Moines who voted no, said it will be a while before Iowans notice the impact on their property tax bills. “I think that it will have an effect in terms of future tax growth, but we had a plan tha would rebate everybody $1000 of immediate relief because we need it now,” Meyer said during a recent interview on “Iowa Press” on Iowa PBS.
Meyer also said 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. “I hope it has the desired effect of lowering taxes,” Meyer said. “I’m just skeptical that it will have a long term effect.”
(Radio Iowa story and picture)
