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February 2013 Policy Study, Number 13-2


Creating a Fair Property Tax System: Is it Possible?


Where Are Your Property Tax Dollars Going?



When we take a look at property taxes over the last 20 years, we see that property tax collections in 1992 were $2,080.7 million and in 2012 they were $4,641.5 million.[12] This is an increase of 123.1 percent over the last twenty years. Yet, the change in the Iowa General Fund Receipts over the same period of time is from $3,400.2 million for 1992 to $6,311.1 million in 2012.[13] This is an increase of 85.6 percent. There is a big difference from 85.6 percent to 123.1 percent. Do you feel that your services for county and city government have become dramatically better? Is your local school district one of the best in the nation? Not at all. In fact, we have seen our schools decline over this period of time; we have seen services cut at the county and local level. So what does this mean for the taxpayers?



School districts receive the largest portion of the property tax revenue collected at 42 percent. If we look at the change in tax collections from the local schools, we see a change of 108.9 percent with collections in 1992 being $947.7 million to $1,979.8 million in 2012.[14] We know that schools have seen an increase in state funding, and yet they have also increased our property taxes, while test scores fall. Currently, as the Legislature is working to set allowable growth for the school districts, many schools are threatening that they will have to lay off teachers if allowable growth is set at zero percent.



The second largest recipient of property tax revenue is local governments. Local governments collected $503.1 million in 1992, and in 2012 it was $1,344.5 million. This is an increase of a staggering 167.2 percent. WOW! The counties were collecting $515.3 million in 1992 and $1,004.1 million for 2012. The increase there is only a 94.9 percent. While not as scary as local governments, it is easy to see why you are feeling a little over taxed.


The community colleges and hospitals actual dollar amounts aren’t as large. Yet the percentage increase is staggering for them. The community colleges collected $37.5 million in 1992 and $114.4 million in 2012, which is a 205.1 percent increase. The hospitals increase is 213 percent with collections of $30.6 million in 1992 and $95.8 million in 2012. So do you think it is time to do something about our property taxes?





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