Business Record file photo.
With the first funnel deadline of the 2026 legislative session passed, Iowa lawmakers are expected to turn their attention to bills that focus on property tax relief, which are exempt from funnel deadlines, and issues surrounding workforce.
Property taxes are a priority for lawmakers and Gov. Kim Reynolds this session to make Iowa’s tax system more competitive for individuals and businesses.
Property tax reform bills have been introduced by Reynolds and in the House and Senate.
Reynolds bill, filed as Senate Study Bill 3034 and House Study Bill 8563, includes a 2% cap on revenue growth for local governments, as does the House version, House Study Bill 598.
The House bill allows for value of new construction to incentivize growth, while Reynolds’ bill excludes school funding.
The Senate bill, Senate Study Bill 3001, would gradually overhaul the property tax system. It would phase out the property tax rollback and allow for a larger homestead exemption.
Each bill remains at the subcommittee level.
It’s a continuation of the debate from previous years, and local governments have expressed concern about capping revenue from property taxes and the impact that would have on their ability to provide services and incentives for development, possibly hindering their ability to grow.
Another bill that is being watched by the business community this session is Senate File 2031, also known as the Iowa Economic Development Authority Omnibus Bill. The bill would expand high-quality job expansion incentives, reauthorize MEGA site incentives and add jobs training to the Business Incentives for Growth, or BIG, program that was created during the 2025 session.
That bill also remains at the subcommittee level.
