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State tax changes mean some counties will lose millions in road dollars

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January 10th, 2024 by Ric Hanson

(Radio Iowa) – Officials say some Iowa counties could fall short of having enough money to fund roads unless state lawmakers take action.

Woodbury County Engineer Mark Nahra says changes to Iowa’s new property tax system mean a loss of millions for his county alone. Nahra says counties that do not meet the minimum tax levy will lose road tax fund money and matching farm-to-market road funds.

“The limitations that were put on property tax growth under House File 718 affect the county road department’s ability to raise revenue out of property taxes,” he says.

Over a ten-year period, he estimates the cost for Woodbury County will be more than $26-million .

“If we don’t have that funding available to us,” he says, “it’ll result in some deterioration of our primary paved routes in the county.”

Nahra says if state lawmakers decide -not- to change the current law, counties with low tax levy rates may lose road funding.

“They need to make it quickly,” he says. “This year, we’ve got enough levy from last year that we can make our minimum local effort. We start falling short in fiscal year 2026, and then that shortfall accelerates.”

Nahra says about a dozen Iowa counties will be impacted in the next two or three years if lawmakers don’t modify the state law this session.