Potholes and sewers can’t repair themselves. Police officers don’t work for free. Public hospitals can’t survive on donations. Iowans expect cities and counties to provide basic services. We pay property taxes to help cover the expense and likely believe that everyone should pay their fair share.
Except that is not necessarily how things work.
In Des Moines, 13 percent of assessed property is not subject to property taxes, according to a Des Moines Sunday Register investigation. These properties, valued at more than $1.3 billion, include hospitals, colleges, government buildings and nonprofit organizations.
Churches are exempt from taxation. So are the state office buildings that run for blocks east of the city’s downtown. So is AIB College of Business, Drake University and Grand View University. So are numerous other properties.
When so many entities don’t contribute to the local government, homeowners and businesses pay more to make up the difference. Even that isn’t enough money. Des Moines and Polk County officials struggle to find enough money for police and fire departments, parks and streets and schools. As the number of tax-exempt organizations grows, the revenue problem for cities and counties is only going to get worse.
The Iowa Legislature must finally recognize this reality and muster the political courage to make alternative sources of revenue available to cities and counties to pay for government services on which the people, businesses, schools and nonprofit entities rely.
Unfortunately, many lawmakers are not keen on helping local governments find new sources of revenue. When they add to the list of tax-exempt property, legislators add to local governments’ financial challenges.
The Iowa Code contains a long list of classes of property that shall not be taxed. It includes provisions for cemeteries, religious associations, agricultural entities, charities, nonprofit nursing homes, low-rent housing, public television stations, community development organizations, Web-search portals and data center businesses.