OPINION:
Across the country, property taxes have climbed steadily, often faster than incomes. Two states — Iowa and Texas — offer a useful window into both the scale of the problem and the policy debate over how to address it.
Over the past two decades, property tax collections in Iowa have increased by more than 107%, with local governments projected to collect over $6 billion in fiscal year 2026. In Texas, local governments now collect more than $80 billion in property taxes annually — roughly a 70% increase from 2015 to 2024.
Property taxes must be paid regardless of fluctuations in income, which can place strain on both families and businesses. For businesses, the impact is especially pronounced. In Iowa, property taxes account for an estimated 40% of the local tax burden. In Texas, that share is even higher, approaching 62%.
Those costs influence hiring decisions, expansion plans, and where entrepreneurs choose to locate.
Both states have also pursued broader tax reforms aimed at strengthening their economic outlooks. Iowa, for example, has reduced its top individual income tax rate from 8.98% to a flat 3.8%. Texas, long a zero-income-tax state, has emphasized maintaining a competitive fiscal environment as its population and economy have grown. Yet in both places, rising property taxes have emerged as a notable exception to otherwise pro-growth fiscal policies.
At the center of the debate is a basic fiscal relationship: when local government spending rises quickly, property tax collections tend to follow. Recognizing this, policymakers in both states have proposed measures aimed at lowering local government spending.
In Iowa, Gov. Kim Reynolds has proposed a 2% cap on property tax revenue growth for local governments, arguing that “the real driver of the problem” is spending. In Texas, Gov. Greg Abbott has called for limits that would tie local spending increases to population growth plus inflation, or a set percentage threshold, whichever is lower.
Both Ms. Reynolds and Mr. Abbott understand that government spending drives taxation. If property tax bills are to become more predictable — and more sustainable — the conversation must begin with spending.
MEG TUSZYNSKI
Research assistant professor and managing director, Bridwell Institute for Economic Freedom at Southern Methodist University
Dallas, Texas
JOHN HENDRICKSON
Policy director, Iowans for Tax Relief Foundation
Des Moines, Iowa
Please read our comment policy before commenting.