Property Tax Wars in Iowa
Topic: A Tax to Grind, Property Tax Administration
Thursday, 28 April 2011 by David H. LeVan
Loading ...Did you know that Iowa and Missouri had a war? Hard to believe but it’s true! And property taxes played a significant role in the dispute. The Honey War of 1839 began when both states thought a 9.5 mile strip running the entire length of the border belonged to them. Things got heated when a Missouri tax collector decided to cut down three trees containing honey in the disputed territory to collect the honey in lieu of taxes (fortunately the three trees were the only casualties in the war). Things got out of control when the sheriff from Clark County, MO was arrested by the sheriff of Van Buren County, IA for trying to collect taxes in the disputed territory. Tensions mounted and militias from both states gathered at the border. Cool heads prevailed and the dispute was ultimately settled by the U.S. Supreme Court. All that conflict over property taxes!
It seems that Iowa is once again engaging in a dispute involving property taxes, only this time the conflict is within the state (good news for Missouri). The dispute is over a sweeping property tax reform bill that would cut commercial and industrial property tax collections almost in half over the next 5 years. According to a recent study by COST, “Competitiveness of state and local business taxes on new investment”, Iowa has the highest effective property tax rates for commercial and industrial structures of all the states. Proponents of the bill say the high property taxes on businesses impede local development. Critics of the bill say it washes away the autonomy of local governments.
The future of the bill is unclear as the militias (which are now referred to as Republicans and Democrats) face off at the capital. Each controls a chamber of the legislature. Hopefully no honey trees will be destroyed in this dispute.
I Really Need to Get to North Dakota
Topic: A Tax to Grind, Property Tax Administration
Thursday, 14 April 2011 by David H. LeVan
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The checked off portion of my bucket list for places visited includes 49 states and almost 30 countries – the one state missing…….. North Dakota. For the past 15 years I have been troubled by my inability to mark North Dakota off the list. I’ve tried to talk friends from Minneapolis into making a “quick” trip over to Fargo but they never have the time. I’ve tried to come up with a reason to justify going but to no avail….. that is until recently.
North Dakota is not acting like the rest of the states in this recession. In fact, they have so much money in state government that they recently enacted $400 million in income and property tax cuts. Yes, you read correctly – $400 million in tax cuts! And they are debating on doing more! Should they abolish property taxes? How about the individual income tax? What is the most effective way to reduce taxes? These are questions state legislators are talking about! Contrast that with California who is projecting a $25 billion budget shortfall, or contrast that with, well, almost any other state.
In addition to cutting taxes, the people of North Dakota voted to create a rainy day fund for the state, which is estimated to be in excess of $600 million (almost 20% of the total spending in a two year budget cycle). Imagine that! If you are from any other state that’s all you can do is imagine it. They have the lowest unemployment of all the states, the third highest GDP growth, one of the most stable housing markets, and the lowest credit card default rate. And, again, they are looking for ways to cut property taxes! I really need to get to North Dakota! Anyone with me?
The Great Tax Race
Topic: A Tax to Grind, Property Tax Collections
Thursday, 07 April 2011 by David H. LeVan
Loading ...I like to watch the silly races they have at ball games (like at yesterday’s White Sox home opener). Sometimes it’s an animated thriller between the pepperoni, sausage and cheese pizzas. Who will win? You can feel the excitement. Other times they actually have people in costumes… the hamburger, fries and coke. Who will win? Who will fall over due the awkward shape of their costume? Exhilarating!
Here’s a question… If there were a race between the three major state taxes, who would win?
Answer… If you look at total dollars collected, property taxes would be the winner. According to the U.S. Census Bureau, 2010 collections are estimated at $250 billion for income taxes, $286 billion for sales taxes and $475 billion for property taxes. If you look at growth, it would still be property taxes. In the past 10 years income taxes have increased 15%, sales taxes 28% and property taxes a whopping 92%.
Not nearly as exciting as the pizza race.