HB 1670, which changes the arbitrary 1% property tax cap to tie it to your city’s cost drivers – inflation and population (up to three percent) – was heard in the House Finance Committee on Monday, February 20. AWC supports this modest change to allow city elected officials to adjust this major revenue source in response to community needs and increasing expenses.

City support is needed before the committee’s vote scheduled for February 21 to encourage passing the bill out of committee before Friday’s fiscal committee cutoff deadline. Please talk to your legislators and ask them to urge members of the House Finance committee to pass the bill before the deadline.

Remind your legislators that:

• Property taxes are about 22% of all city revenues.
• The current 1% cap is an arbitrary number that does not keep pace with city expenses.
• The average CPI over the last ten years 2011-2021 was 2.6%. The things cities buy tend to increase even faster than inflation.
• In addition, by keeping property tax rates arbitrarily constrained, it results in more reliance on other more regressive tax options, which the State Tax Structure Work Group recognized when it recommended this change to property taxes for local governments.
• City elected officials need this local option authority to adjust this major revenue source in response to their communities’ needs and can be trusted to make both revenue and expenditure decisions that reflect those community needs.

Thanks to all of the city officials who took time to testify or express support for HB 1670 at Monday’s hearing and at the hearing last week in the Senate on a similar proposal SB 5618. SB 5618 did not pass out of the Senate Local Government Committee before the policy committee deadline on February 17.

See AWC’s property tax fact sheet for more information.

Date to remember

HB 1670 is scheduled for executive action in the House Finance Committee on Tuesday, February 21 at 8 am.