Local governments across the nation including Iowa rely heavily on property tax as a source of revenue. It is the only source of revenue that the local governments have the autonomy to set a rate and leverage the resources to expend on services based on local needs and willingness of residents to pay. Property tax base for a jurisdiction is determined based on the property tax levy rate and the value of property at a point in time. Property tax levy rates are determined by a set of variables that include level of total spending, non-property tax revenues and the total assessed property valuation. Similarly, the total assessed property valuation which is the base upon which the tax is levied is also determined by a host of factors including demographic size and growth, agricultural contribution to the area, age of housing stock, and the presence of commercial and industrial establishments. In addition, the economic conditions that prevail in an area also influence the pressure on land and hence affect property valuation. The focus of the recent short article is to: (a) examine trends in property valuation at the county level across the state of Iowa, comparing rural and urban counties over a 15-year period, and (b) highlight based on property valuation, ways it impacts their overall fiscal health.
Based on analysis findings, while it is apparent that rural Iowa continues to depopulate and economic growth lags other urban counterparts, with respect to property valuation, it is difficult to paint a broad brush to characterize rural counties. Areas of the state endowed with natural resources that increase value of land as well urban clusters possess a larger tax base. However, on a per capita basis, the distinction is even harder to discern. The northwest and northeast counties perform well on the fiscal health index created as part of the IGFI outreach efforts. Lot of that can be attributed to the strong natural capital the regions are endowed with. Tourism contributes to the region’s economy that is also reflected in the high value properties in the region due to the high amenity value. The southern portion of the state with few exceptions lagged compared to their peers across the state in terms of per capita valuation and overall fiscal health.
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Amelia Schoeneman, graduate student in Community and Regional Planning is a co-author of this article.