County treasurers will be sending out property tax statements in the next two weeks and citizens should expect an increase in their property taxes, says the Iowa State Association of Counties.
"Unfortunately counties will have to increase property taxes due to promised tax credit reimbursements that were taken away by the state," said Dick Heidloff, ISAC president and Lyon County Treasurer. "County treasurers want people to be aware this is coming, and when they are upset to put the blame on the source of the problem, the state."
In the past, the state has lowered property owners' tax liability through the use of property tax credits - the homestead credit, the military credit, the family farm credit, the agricultural land credit and the low income/elderly credit. If a homeowner qualified for the credit, by being a veteran for instance, the state would cover the cost of a portion of the homeowner's property tax bill.
This year funding for the low income/elderly credit will take a dramatic hit. Seniors that own their homes will only receive 40 percent of the credit to which they are entitled - that amounts to about half of what they received last year.
Every homeowner will see their homestead credit cut to the 85 percent level, and veterans will see their military credit cut to the 98 percent level. All of these figures are estimates from the Iowa Department of Revenue and Finance.
The drastic cut to the low income/elderly credit means that elderly or disabled homeowners whose annual income is less than $9,060 may see a tax increase of up to $400.
"When the state balances its budget by reducing property tax credit reimbursements, such as the low income/elderly credit, it directly impacts the citizens that need the assistance the most," said Bill Peterson, ISAC executive director.
Last year funding was cut to 90 percent for the homestead credit, 80 percent for the low income/elderly credit and 97 percent for the military credit.
"Just like last year, the Legislature knew that reducing the funding for property tax credits would mean higher property taxes come July 1."