Winneshiek County is poised to benefit from a significant increase in property valuations, with an anticipated rise of 9.52 percent for the upcoming fiscal year. County Auditor Ben Steines presented this information to the Board of Supervisors on Monday morning, highlighting a notable shift in the county’s financial landscape.
This increase comes against the backdrop of Iowa House File 718, a law enacted in 2023 that imposes strict limits on the ability of counties to raise property tax rates. Steines explained that despite a taxable valuation growth of 3.33 percent last year, the county was forced to reduce its levy rate, restricting property tax collections to approximately 1.3 percent more than the previous year. This situation has forced county officials to be cautious in their budget planning as they prepare for the Fiscal Year 2026-27 budget.
Steines conveyed optimism about the recent property valuation figures, stating, “We had a total taxable valuation growth of a little over 9 percent and, with the property tax restriction, that means our property taxes will go up a little over 6 percent.” He noted that many department heads had not anticipated such a favorable valuation year, which could alter budget requests moving forward.
The county has historically kept budget requests conservative, focusing on employee salaries and benefits rather than operational expenses. “Most departments would rather see new money going towards making sure they have salaries and benefits covered than worrying about more operational expenses,” Steines remarked. This cautious approach stems from previous years where growth in funds was limited, leading to concerns about potential cuts if restrictions under HF 718 continued.
In contrast to the 3 percent growth seen last year, Steines expressed that the new valuation will provide some relief. He noted that “last year’s growth was 3 percent, and just looking at the General Fund alone, if you only have 3 percent new money, and you give a 3 percent raise, that’s going to eat up almost all of that new money.” This year, in light of the improved valuations, he anticipates being able to provide 3 percent raises to county employees, although he cautions that this may be a temporary benefit.
Steines has consistently voiced his concerns regarding the fairness of using property valuation as a basis for taxation. He proposed alternatives such as a Local Option Fuel Tax or a Local Option Sales Tax that could more equitably distribute the tax burden based on usage rather than ownership. “When my neighbor might have a 1,000-acre parcel and has to pay 10 times as much in property taxes, are they getting 10 times as much service from our sheriff’s office? No,” he stated, highlighting the disparity in service delivery based on property size.
The implications of HF 718 remain a critical point of discussion. Steines informed the Board that the bill includes a five-year sunset provision, indicating that the Iowa legislature must take action before Fiscal Year 2028 to either amend or replace the law. “They have to pass something either in this legislative session or in the 2027 legislative session,” he said, emphasizing the urgency for legislative action to avoid reverting to previous tax structures.
As Winneshiek County prepares for its budget proposals, the unexpected increase in property valuations offers a glimmer of hope for local officials navigating the constraints imposed by recent legislation. While Steines remains cautious about future financial stability, the county’s current trajectory suggests a more favorable budget outlook for the upcoming fiscal year.
