Session preview: Iowa Legislature returns to Capitol with property tax reform in view | Tri-state News

They also highlighted plans for legislation specific to their committee assignments and other responsibilities and general efforts to further economic development, though nothing as far-reaching as property tax changes.

Democrats — who return to Des Moines with smaller minorities in each chamber — warn of impending budget troubles they expect will be a result of Republicans’ years of aggressive tax cuts.

Iowa Sen. Dan Zumbach, R-Ryan, said after the Manchester Area Chamber of Commerce’s recent annual elected officials luncheon that constituents should expect more of the majority’s increasingly conservative trajectory this session.

“I think we’re going to try to move things the same direction as we have — try to have as conservative a budget as we can and leave Iowans as many freedoms as we can,” he said.

Iowa Rep. Lindsay James, D-Dubuque, said she expects Republican leaders to again limit Democratic lawmakers’ input and influence on policy development. But she said she would use her position and seniority to keep constituents informed and engaged with ongoing debate at the Capitol.

“People have sent me to the Legislature to be a check and balance and to make sure their voices are heard,” she said.

University of Northern Iowa political science professor Chris Larimer said he so far is uncertain what themes will emerge from Republicans leading the Legislature this year.

“We’re hearing that property tax — capping annual increases and so forth — will come up again,” he said. “… What we’ve seen the last few years is that (Iowa) Republicans are willing to talk about the biggest things on both sides of the ledger — huge changes in taxes and fundamentally changing how public education looks in Iowa, taxes and spending. But with every legislative session, it seems like there is a surprise issue.”

During the November election, Republicans gained three more seats in the Iowa House of Representatives and two more seats in the Senate. With one Senate seat temporarily vacant following the appointment of Lt. Gov. Chris Cournoyer, Republicans have supermajorities — 67 of 100 seats in the House and 35 of 49 in the Senate.

Larimer said safe majorities do not historically slow their agendas after a successful election but that low-hanging fruit from conservative policies largely has been picked in recent years.

“Obviously, Republicans expanded their majorities a little bit,” he said. “And with majority control year nine, you would expect them to feel emboldened. … I am just trying to figure out what that looks like at this point because they have tackled a lot of big issues at this point — in education, in tax reform, on abortion. … They’ve also talked about some of the biggest social issues.”

Iowa Sen. Carrie Koelker, R-Dyersville, said she expects another aggressive agenda.

“Iowa has spoken up,” she said. “They have elected a lot of conservative voices.”

James raised concerns that neither Democratic lawmakers nor the public may be told what Republican leadership is planning until leaders are ready to vote on it. She cited last-minute tax bills sent to the House Ways and Means Committee as an example.

“The hard part of being the minority party in Ways & Means is that we are often handed a tax plan without any context or time (more than a day or two) to consider it,” she said. “Those are negotiations within the majority party, behind closed doors. Then the minority party is pulled in at the last moments.”

Iowa Rep. Steve Bradley, R-Cascade, said at an annual dinner for lawmakers representing Dubuque County that he wants to put more state weight behind local efforts to expand commercial air service to Dubuque Regional Airport. The airport regained daily flights to Chicago in November.

“Carrie and I have always pushed for the Dubuque airport and getting commercial services there,” he said. “We have to keep pushing on that.”

Incoming Iowa Sen. Tom Townsend, D-Dubuque, said he hopes to draw on his labor background to try to dissuade Republicans from bills that could cause the kind of unintended consequences he said he has seen among the area’s working class. He pointed to a 2022 law that cut the amount of time people can collect unemployment benefits and prohibits them from turning down a job offer while collecting unemployment.

“I don’t think anyone (had) in their mind that when they cut the unemployment weeks to 16 that John Deere was going to do these massive temporary layoffs,” he said. “Then people are running out of unemployment, and people are screaming. The president of the UAW is getting killed right now because it’s ‘all the union’s fault.’ (Impacted workers should) talk to your people at the state level.”

Incoming Iowa Rep. Jennifer Smith, R-Dubuque, said she will listen to constituents who voted for her predecessor — outgoing longtime Iowa Rep. Chuck Isenhart, D-Dubuque — as well as her supporters.

“We all have the same goal, to make sure that Dubuque and the state are progressing forward and doing well,” she said of the area’s bipartisan delegation. “I’m always open to hearing different viewpoints and want people to reach out to me so I can have that voice included.”

James said area Republicans have been helpful by keeping her informed as a Democrat in the minority.

“Dubuque is a unique entity,” she said. “We tend to be able to put enough of the politics aside to be able to work together and benefit our people.”

Area Republican lawmakers consistently said they will work on reducing property tax bills this session.

They said voters complained about property taxes more than any other issue during the 2024 campaign cycle — concerns local Democrats also reported hearing — and that the Legislature intends to make major changes.

Such changes would follow a law passed in 2023 that ratchets back the levy rates of counties whose property tax revenue is expected to be 3% higher than the year before, and then again if property tax revenues are 6% higher than the year before. The law also created a $6,500 property tax exemption for Iowans 65 and older and increased exemptions for veterans.

Iowa Rep. Shannon Lundgren, R-Peosta, serves on the House Ways and Means Committee and said during a recent Dyersville Area Chamber of Commerce forum that she will try to consider all sides of the debate but expects action this session.

“It’s a really delicate balance,” she said. “We know that our counties and cities fund things close to home. But when we’re out knocking doors in campaign season, the No. 1 thing we hear about is property taxes.”

Koelker serves on the Senate Ways and Means Committee and is an assistant Senate majority leader. She said at the Dyersville forum that she supports further property tax reform.

“We’re not down there to be friends with everybody,” she said at the event in December. “Last year, we tackled property taxes a little. It was a pretty aggressive move. … Local governments, we forced a lot of them to reduce their revenue. Was it ideal? No. Now our local governments are going to have to continue to do that. We gave them some time to adapt. … But our property tax system is a mess across the board.”

Dubuque Mayor Brad Cavanagh said during the dinner with area lawmakers that he is worried about the Legislature further restricting local government tax levies.

“There is no state in the United States that doesn’t have property taxes,” he said. “The goal of property taxes is to make things better. … Dubuque is an example of conservative taxing and spending. We’re proud of that. We want to do more of that. It’s not an easy thing to do while you’re worried someone else is going to stop you from keeping the lights on.”

Dubuque County Supervisor Harley Pothoff asked that the Legislature consider not just people’s property tax bills, but also residents in different communities who pay more than others and unfunded mandates the state has increasingly required of local governments.

“There has to be some skin in the game for everybody,” he said. “We have a lot of small towns in Dubuque County. (Their residents) pay the base (county property tax) rate, and they don’t pay a rural fee. And their towns collect (almost) no taxes, so they mostly use county services only.”

James expressed some sympathy for local governments and criticized Republicans for pushing through the last reform before comprehensively vetting its measures.

“When I knock doors, I certainly hear about those financial struggles,” she said. “… I can feel the pain of property taxes. That should be a conversation we have. But when we slash state budgets, then we slash local and county budgets, then we have to talk about the economic realities of those impacts — being services. We have police departments, fire departments. We have to fix roads and potholes to fill. There are things local governments need to do. … If we’re going to go in and make all of these massive tax changes, we have to do it with care.”

Smith will serve on both House Ways and Means and on the House Local Government Committee. She asked that local elected officials stay in close contact with her so she can share expected impacts with her caucus.

Zumbach said at the Dyersville forum that Republican leaders have discussed a potential tiered system, with different rules for larger and smaller cities. But at the Dubuque dinner, he told local elected officials they should focus on cutting their budgets or otherwise being more efficient, rather than criticizing the Legislature.

“When (voters) have a property tax concern, they don’t always go to (county supervisors), but they come to us,” he said. “I don’t know why. But they say, ‘My property tax bills went up 11% last year.’ Where’s that supposed to come from? People are really feeling pain from that. … We can’t solve it at the state level. … So let’s ask, ‘What can I do to fix that problem?’ As (local government) administrators, what are you going to do differently? As a school board, what are you going to task your members to do differently?”

In recent sessions, the Iowa Legislature — typically along party lines with Republican support — has reshaped the state’s education system.

That has included offering public funds to students to attend private schools; raising minimum pay for new and seasoned teachers; and restructuring the state’s area education agencies, which provide special education and other supports for public and private schools. The Legislature also passed a law overhauling high school social studies curricula and banned materials that are not “age-appropriate” or include “descriptions or visual depictions of a sex act” in school libraries and classrooms.

Meanwhile, local school leaders repeatedly have cited concerns that state funding increases for public schools have not kept place with inflation each year.

Altogether, Dubuque Community Schools Chief Communication Officer Mike Cyze told attendees of the Dubuque legislative priorities dinner that public schools’ position has become nearly untenable.

“Over the past decade, while we have received small increases in (state) funding, they haven’t kept pace with the cost to operate,” he said. “We’re proud of our longstanding reputation for excellence and financial stewardship. But low state aid budget pressures have forced us to make difficult decisions and to reduce programming in areas that we know benefit students.”

Troy Osterhaus, a principal and incoming superintendent in Maquoketa Valley Community School District, said at the Manchester luncheon that his district is just getting by with community support.

“Our community and our parents support and value education,” he said. “You don’t get that everywhere.”

During the Dubuque dinner, Koelker refuted the idea that the Legislature is not funding education enough.

“I am going to push back on the myth that we aren’t funding education,” she said. “Maybe not appropriately from everyone’s perspective — but we’re spending more on education than we ever have.”

In Dyersville, Koelker said public school districts’ budgets and administration are growing, while student enrollment is dropping.

James criticized Republicans’ funding of public education during Dubuque Area Chamber of Commerce’s annual Legislative Kickoff, pointing out that they have said they do not have enough money to appropriately fund public schools while creating a new budget for private schools via education savings accounts, which let students use public funds to attend a state-accredited private school.

“We need to have a high-quality education system,” she said. “That depends on us putting more investment, heart and energy there. … The Dubuque Community School District has persisted with very limited resources, … but one of my kids has a P.E. teacher doing classroom work because his district could not find a classroom teacher to meet (the school’s) need. For a time, one of my son’s (schools) went without a school librarian.”

Area lawmakers said they have business around education in mind for the coming session.

Smith, an economics professor at Loras College in Dubuque, said she wants to change schools’ professional curricula.

“As a professor, I worry a lot about what our students are learning (when they are younger),” she said. “In the high schools, I want to make sure the students have exposure to some of the trades. People find things by having exposure to them that they may have never known were an option.”

Koelker, as well as Gov. Kim Reynolds, said the Legislature has been pressured by educators to make statewide policy for students having cell phones in schools.

“Our school boards want local control, but then they came to the governor and said, ‘I want you to do something about cell phones (in schools),’” Koelker said. “I don’t even want to touch it. But if we do, I want it to be something generic and then have the school boards deal with it, rather than the 100-some people in the Legislature have to be bad cop.”

The Iowa Legislature is legally required to pass a balanced budget each session. Area Republican lawmakers acknowledged that they will have their work cut out for them this year, given the impact of recent tax cuts.

“There’s no more money to go around because the same people who are concerned about their property taxes going up are also concerned about their income taxes,” Zumbach said at the Dubuque dinner. “So if we have 1% misjudgment on education funding, there is no money left for the (Department of Natural Resources) because that’s all of the DNR budget.”

During its annual December meeting, the state Revenue Estimating Commission predicted that — mainly due to Republican lawmakers accelerating the transition to a flat 3.8% top income tax rate — the state’s revenues and transfers would total $190 million less in fiscal year 2026 than it is budgeted to spend in the current fiscal year.

The REC also projected an $11.9 million decrease in state gambling revenue from the current fiscal year, which Koelker mentioned in Dyersville.

“With gaming receipts and our neighboring states getting more of that, I foresee that budget going down,” she said. “So we have to get as much as we can out of that budget.”

James, at the Dubuque chamber kickoff, presented the REC’s projections as proof of the negative state budget impacts Democrats said would come from Republicans’ income tax cuts.

“Over the last 10 years, Iowa has significantly reached into our tax structures and systems,” she said. “We haven’t felt the full impact of those actions yet. You don’t feel it until it’s phased in. … Some of them, I would argue, have been detrimental and harmful.”

Republican leaders have been pooling reserve funds, as well as increased federal funding issued from laws enacted under the outgoing Biden administration, to hold the state over until the economic growth they anticipate eventually will come from the income tax cuts.

James criticized that strategy as gambling with Iowa’s future.

“The state has enough relief, enough surplus to start patching holes,” she said. “We also have a taxpayer relief fund — which is one-time money, meant to give taxpayer relief, not to patch holes in the budget. How do we be fiscally responsible with our state taxes? (Because) when those surplus funds run out, when those taxpayer relief funds run out, if we’ve been using one-time dollars for ongoing expenses, we’re going to be in a world of hurt.”

Reynolds also has turned down tens of millions in federal funding offered to the state — $30 million-plus for climate change resilience planning and another $30 million to provide summer food funds for low-income children — citing concerns about requirements and guidelines that came with the funds.

Townsend said such a risky revenue position would come at a cost.

“I have to know what services we are going to cut to make that possible,” he said. “I heard a lot about services that aren’t being provided that now are (supposed to be) provided.”

Meanwhile, area officials are eager for more supports on fronts specific to them.

Cavanagh pushed for more money in the state’s flood-mitigation programs to help cities prepare for higher waters expected to increase along with human-accelerated climate change.

James spoke at the kickoff of how the Iowa Tuition Grant for lower-income, first-generation and other students is key to keeping Dubuque County’s private colleges afloat.

State leaders across the political spectrum have acknowledged that Iowa’s economy needs help from the Legislature to grow.

With a career in tourism and economic development, Koelker said she has ideas for bills this session and expects the recent income tax cuts to pay dividends in attracting and retaining workforce.

“We are talking about an event bill so we can bid on some of these things — NCAA, Taylor Swift, things we don’t have the pocketbooks or our destination organizations don’t have the pocketbooks — to get them here,” she said at the Dubuque dinner. “We need people to live here and stay here, not just come visit our parks. That’s why we came up with our tax plans.”

Still, each new workforce program likely would come with a price tag at a time when the Republican-led Legislature has been reducing funding for existing workforce supports — including through tightening qualifications for programs such as Medicaid and unemployment insurance.

Townsend said he has seen negative impacts of those choices both as a local labor organizer and as founder of Dubuque Area Labor Harvest’s food security programs. He will serve on both the Senate Ways and Means and Senate Workforce committees in his first term.

“I’m trying to lean into my experience as a worker and in workforce, someone who’s sat on a construction site, because I don’t think there are many people in either side’s caucus who have done that,” he said. “I have electricians working in Illinois tell me, ‘Tom, if I was to come back to Iowa now, I’d make less money. And then if I get laid off, I’d get less unemployment for a shorter period of time. I’d be crazy to.’”

James doubled down on Democrats’ insistence that Iowa workers receiving lower income than their peers in other states is a primary barrier for economic development.

“People, particularly young professionals, are seeking jobs elsewhere,” she said. “When individuals leave, they are not only taking their personal contributions with them. It’s also their economic potential. Low income growth discourages people staying or coming.”

James said that is one reason she would consider local government impacts in any property tax discussions, since the city of Dubuque’s local investment was part of what convinced her family to move to Iowa.

But local government investments and services also play into their property tax levy. So Lundgren recommended that local governments consider carefully what they budget.

“Our family — with two older people and no kids at home — we don’t use the parks,” she said. “But I know parks are important for (younger) families. We have a (list of stated needs) at the local level, saying we need libraries and we need parks and we need DEI committees. I’m not saying that’s all bad. I’m just saying look at what your city or county are needing.”