Property Tax Implementation Committee

Subcommittee # 2 – Broad Implementation Issues

Minutes from meeting of November 21, 2003

The initial meeting of subcommittee # 2 (Broad Implementation Issues) was called to order by Representative Jim Kurtenbach at 2:30 p.m. at the Ames City Hall. Subcommittee members present were Representative Kurtenbach, Ted Tedesco, Herman Quirmbach, Larry Sigel, Mary Maloney, and Curtis Rouse. Twenty-eight others were also in attendance.

The subcommittee met and had a wide-ranging discussion. The discussion included sample objectives as to what a property tax system may attempt to attain:

1. Reliable and predictable revenue source for local government.

2. Equitable taxation across/within classes of property based on economic value of property and should be consistent statewide.

3. Simple system and transparent to the taxpayer.

4. Responsive to changes in valuation and classification.

5. Foster economic growth.

The committee began a discussion that will be continued during the second meeting on December 19, 2003, pertaining to whether the full property tax implementation committee may recommend any legislative action during the 2004 Session.

The second meeting of subcommittee # 2 will continue a discussion of property tax limitations and provide a brief review of Iowa education funding sources and additional discussion of recommendations that may come before the Iowa Legislature.  Issues pertaining to property tax limitations included:

1.  The rollback system and any potential "freezing" of the rollback.

2.  Changes to the capitalization rate for agricultural productivity valuation.

3.  Levy limitations and any potential removal of levy limitations.

4.  A proposal to move off of levy and assessment limitations to a system of budget or spending limitations.

Larry Sigel agreed to submit an electronic copy of a presentation that addresses Iowa school finance for posting on the Property Tax Implementation Committee website.

Representatives from the Department of Management and the Department of Revenue will attempt to identify reports that address the experiences in Michigan, Indiana, and other states that have shifted education finance off of the property tax system and on to the sales tax system.

The next meeting of subcommittee # 2 is scheduled for Friday, December 19, 2003, 10:00 a.m., Ames City Council Chambers.