West Des Moines kept its promise: What you need to know about property taxes
Recent stories in the media have focused on the concerns some residents have about property tax relief now that the Polk County Assessor has increased the assessed value of homes by as much as 10 percent or more.
It’s easy to lose sight of all the items that determine what you pay in property taxes. A number of moving parts make up the total amount of taxes you pay each year, so it’s important to know what those are and who is responsible for them.
Keep in mind that increased property valuations don’t necessarily mean you’ll see a similar increase in property taxes.
In general, four things significantly impact the total amount of property taxes you pay:
1. The County may increase or decrease your tax bill by adjusting the assessed value of your property.
2. Taxing authorities, such as the City, the County and your School District, may increase or decrease your tax bill by changing their tax rate (also called their levy rate).
3. The state of Iowa rollback that is calculated each fall sets the amount of your property valuation that may be taxed by all taxing entities.
4. Credits or exemptions you receive as a property owner.
Let’s take a closer look at each variable.
1. The County Assessor
Valuations are set by each County Assessor every two years. This year, because of a strong and growing housing market, valuations increased significantly. Does this mean your tax bill will also increase significantly? Not necessarily. The answer depends on your valuation, the tax rates levied by other taxing entities (No. 2), the state rollback (No. 3) and credits and/or exemptions (No. 4).
2. Other Taxing Entities
The second piece that impacts your property taxes concerns taxing authorities, such as the City, the County and your School District, that can increase or decrease your tax bill by changing their tax rates.
The back of your Property Tax Statement shows which entities are receiving potions of your property tax payment. Depending on where you live, you will see that your total tax bill includes taxes charged by your School District, your City and your County. You also pay taxes on a much smaller scale for amounts assessed by Broadlawns Medical Center, Des Moines RTA (DART), Des Moines Area Community College, County Assessor, County Ag Extension and the state of Iowa.
The City’s tax rate, as you might expect, is controlled by the City and is approved by the City Council. The City has no say in how other taxing entities (such as the County or a School District) set their tax rate. What this means for you as a taxpayer is that even if one entity lowers its rate, another entity or entities might increase their rate(s). The combined effect is all these rates impact your final tax bill.
Property tax rate reduction due to LOSST
During the Local Option Sales and Services Tax (LOSST) elections, the City of West Des Moines pledged to reduce our City tax rate. The City’s tax rate, like other entity’s rates, is expressed as an amount per $1,000 of property valuation.
After LOSST passed in Dallas County, we lowered the City’s tax rate for property owners from $12.00 per $1,000 of valuation to $11.79.
When LOSST was recently approved for Polk County, we lowered the City’s tax rate again (as promised) from $11.79 to $10.99 per $1,000 for property owners.
Combined, that’s a reduction of $1.01 per $1,000 of valuation for all property owners in West Des Moines. We believe this is a good move for our residents with the end result being that visitors to our community are contributing towards paying the expenses of the City.
Below is a table that shows how West Des Moines’ tax rate after the LOSST vote compares to other cities in Central Iowa.
|CITY|| TAX RATE
| West Des Moines
| Pleasant Hill
| Des Moines
3. The State Rollback
The total property tax amount you pay each year is also determined by the state rollback which calculates the amount of your property valuation that can be taxed.
Total statewide assessed value of residential property cannot increase by more than 3% annually. In order to make this happen, the state reduces or “rolls back” home values by applying a ratio which is calculated each year.
For Iowa, that ratio in 2018 was 56.9391%. Therefore, a home with a market value of $100,000 (as determined by the County Assessor), would have an assessed value of only $56,939.
4. Credits and Exemptions
Credits and exemptions in Iowa may also reduce your taxes, such as the Homestead Credit, which reduces the appraised valuation of a primary residence before property tax owed is calculated. This results in a lower annual property tax rate for owner-occupied homes. Property owners may also apply for other exemptions or credits such as those offered for veterans, seniors and the disabled.
Your 2019 Property Valuation
The most recent valuation for your property by the County Assessor will be used to calculate your property taxes due in September 2020 and March 2021.
Later this fall, the state will announce the rollback that will be used to determine the percentage of your property valuation used to calculate your taxes. We’ll also know early next year what tax rates other taxing entities will levy, and this will help determine your property tax bill.
West Des Moines kept its promise
As for your City tax rate, West Des Moines has kept its promise. With the passage of LOSST in Dallas and Polk County, we have reduced the City’s portion of your total tax rate by $1.01 per $1,000 of valuation for property owners in West Des Moines.
Our goal is to keep costs in check, review revenue and determine if a tax rate reduction can occur while maintaining our level of service.