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Wednesday, January 22, 2020

Property taxes for climate change. What’s next?

In case you haven’t heard, Iowa City is proposing a 24-cent increase per $1,000 assessed in the emergency fund portion of their property tax levy in order to fight climate change.

They intend to use this nearly $1 million in new revenue for reducing carbon emissions by:
  • Offering incentives to property owners
  • Planting trees
  • Providing educational programs.
If you subscribe to the idea that there is, indeed, a climate crisis, then this likely sounds good on the surface; however, even those worried about carbon emissions should be concerned.

When Iowa City mentions incentivizing property owners, what does this mean? While details are yet to be seen, it likely means offering property tax dollars to people who make what the city deems to be environmentally-friendly improvements to their property. Programs like this usually cover a portion of the cost of the improvement.

Does this help people struggling to afford to stay in their homes amid rising stacks of bills?

No, because these individuals don’t have the capital to invest additional dollars into their properties, even if those investments are subsidized. Instead, these individuals are forced to pay this additional tax for something they may not support and cannot afford so people who can afford to make property improvements may receive their tax money. 

Can Iowa City do this?

Absolutely. Iowa Code chapter 384.8 allows cities to assess an emergency tax levy not to exceed 27 cents per $1,000 assessed, and there are no stipulations to what constitutes an “emergency.” The only requirement is that city councils must vote to reauthorize the emergency levy annually. The emergency levy is not included in the $8.10 levy cap that exists for Iowa cities.

In fact, many cities choose to use their emergency fund levy.

According to data from the Iowa Department of Management on Iowa cities’ FY20 budgets, 437 of Iowa’s cities, or 46.4%, are using their emergency fund levy. You can find out if your city is using theirs by opening the Department of Management document on city budgets and looking at the emergency fund column for your city.

Iowa City serves as an example of why being aware of what your city is doing with your tax dollars is so important. While city officials may use your tax dollars in this manner, they may only do so if the people allow it. To the credit of the Iowa Legislature which passed Senate File 634 last year, an important property tax transparency bill, local governments now have an opportunity to make policy decisions with greater buy-in from their citizens. This is the time of year when budgets are being proposed, public work sessions are occurring, and, within a few months, budget hearings will be held. Iowans have a personal and civic responsibility to be informed and engaged. 

Regardless of what your city may be proposing for next year, emergency climate change action or otherwise, pay attention, show up, and make your voice heard.

What do you think of about a sales tax increase?

Do you support increasing the state sales tax one-cent with three-eighths used for water quality and outdoor recreation projects and five-eighths used for an income tax reduction?
If you haven't already, please take a this short, 10-question survey.
 
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It’s easy for politicians to yield to noisy special interest groups when the taxpayer keeps quietly paying the bills.
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