Gov. Kim Reynolds signed into law on Thursday a bill that adds steps to local government budgeting processes, including explanations for property tax increases.
SF 634 adds a requirement that cities and counties hold an additional public hearing before adopting a proposed budget. If property tax revenues in the proposed budget increase by 2% or more, then the budget must be approved by a two-thirds majority vote of the board or council.
“This bill creates an additional public hearing prior to the approval of a city or county’s budget, allowing more public input and helping increase awareness and transparency to the budgeting process and Iowa taxpayers,” Reynolds said in an issued statement.
Proponents of the bill claim it adds transparency to how property tax increases are justified.
Some opponents claim the bill strips local governments of their local control over budgeting and service needs. The City of Spencer joined other municipalities in approving resolutions opposing the bill.
Democrats have claimed the bill places public employee pension programs in competition with other local government services. By law, obligations to those pension programs must be met.
The bill states local governments must calculate their property tax revenue needs by adding taxes that go toward pensions and benefit funds, taxes that go toward local government services and taxes that go toward various other levies.
Other changes in the bill include later certification deadlines for local government budget.
County and city budgets must be certified no later than March 31. School district budgets must be certified no later than April 15.