The way property taxes are levied in Iowa cities may soon change.

Senate File 2123 passed through a subcommittee of the Senate Local Government Committee Thursday. If the bill passes, it will limit the local ability to levy property taxes.

Pending passage in the House would link the amount of property tax a city could levy to the consumer price index – an assessment of the market value of property – as well as other factors.

Other components of the bill include changing the way mobile homes are taxed and requiring the state to fund mandates before they are passed.

Sen. David Miller, R-Batavia, who chaired the committee that reviewed the bill, said it tries to reach a compromise between different tax authorities.

“The idea is to get some property tax reform that doesn’t hurt anybody, but set some limits that will help us have a more fair and equitable system,” Miller said.

The reasoning behind the bill is to make property tax more predictable for taxpayers and make our current system of property tax levying more even, he said.

City leaders across Iowa have raised concerns about the bill, however.

Ames Mayor Ted Tedesco said tax revenues provide funding for products and services for local residents. If the city is limited to how much it can tax residents, funding for those services will disappear, he said.

“The bill will cause cities in the next three- to five-year period to eliminate services and people,” he said.

Tedesco said he is also opposed to the bill because he believes local governments should be able to govern by the edict of their own people, and services and taxes should be up to the constituents.

“If people want services, they know that they are going to have to pay for them,” he said.

Tedesco said he does support the part of the bill that changes the way mobile home property taxes are levied.

“Those types of homes require the same services as any other home within the city,” he said.

Opposition to the bill has arisen in the Senate.

“There are people in both parties that are opposed to this philosophy,” said Sen. Johnie Hammond, D-Ames.

Hammond said she is very much opposed to the bill, both because it is inflexible about how it levies taxes and because citizens of a local community need to decide for themselves what services they want.

“I don’t believe that by controlling these things by the state we do justice to local people and local government,” she said.

Miller said the bill will not limit the services of cities but rather will help them grow. He said the changes in property tax levying are better than other methods used in the past.

“I think that as a city grows it will have more taxable values, and a city will be able to grow as fast as it wants to grow,” Miller said.

The bill will be referred to the House Ways and Means Committee, which will decide how much priority the bill has this year, Miller said.

“It’s designed to be a new way to look at property taxes,” he said.

“There is nothing in the bill that can’t be changed if it has too much of an adverse effect on cities.”