How the brand new tax reduction invoice will impression house owner’s wallets

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How the new tax relief bill will impact homeowner's wallets

Gov. Kim Reynolds has signed SF619 into law. The legislation cuts taxes and invests significantly in mental health as well as foundational priorities like child care and housing.The governor said the tax reform law will save $100 million in property taxes across the state, but KCCI’s Cynthia Fodor looked into how much the average homeowner would save. With property taxes so high, homeowner Ken Smith is happy with any cash he can keep in his own pocket. “For those of us who are living on fixed income, or senior citizens, it helps relieve the tax burden on us,” Smith said. The new law drops the mental health levy that has been placed since 1996. So how much will that save homeowners? In Polk County, the administrator did the math. “It’s about 55 cents per a thousand valuation. So let’s say you have a $200,000 home. When this goes away it will save $55 on that $200,000 on property taxes,” said John Norris. However, Norris warns counties may have to raise taxes on that same property $25 a year to make up for money lost when the state eliminates backfill payments to local governments that were given to offset a previous commercial property tax cut. If that happens, the average homeowner would still save about $30 a year. Then there’s a cut in income taxes. Starting January 2023, the top individual income tax rate will drop from 8.5% to 6.5%. That’s a 2% savings. The law will also phase out the inheritance tax by January 2025. But mental health advocates like Mary Neubauer who lost her son to suicide said most importantly this law will provide better services that could save lives. “We hear a lot from families desperately looking for services,” Neubauer said. “The current system isn’t working. It’s not keeping up in terms of funding. But we are making progress and I’m really proud of that and hope things will continue to improve as we move forward.”Reynolds said they’re not done yet. Given the state’s surplus, she said she’ll be proposing additional income tax cuts in the next session.

Gov. Kim Reynolds has signed SF619 into law. The legislation cuts taxes and invests significantly in mental health as well as foundational priorities like child care and housing.

The governor said the tax reform law will save $100 million in property taxes across the state, but KCCI’s Cynthia Fodor looked into how much the average homeowner would save.

With property taxes so high, homeowner Ken Smith is happy with any cash he can keep in his own pocket.

“For those of us who are living on fixed income, or senior citizens, it helps relieve the tax burden on us,” Smith said.

The new law drops the mental health levy that has been placed since 1996.

So how much will that save homeowners? In Polk County, the administrator did the math.

“It’s about 55 cents per a thousand valuation. So let’s say you have a $200,000 home. When this goes away it will save $55 on that $200,000 on property taxes,” said John Norris.

However, Norris warns counties may have to raise taxes on that same property $25 a year to make up for money lost when the state eliminates backfill payments to local governments that were given to offset a previous commercial property tax cut.

If that happens, the average homeowner would still save about $30 a year.

Then there’s a cut in income taxes. Starting January 2023, the top individual income tax rate will drop from 8.5% to 6.5%. That’s a 2% savings.

The law will also phase out the inheritance tax by January 2025.

But mental health advocates like Mary Neubauer who lost her son to suicide said most importantly this law will provide better services that could save lives.

“We hear a lot from families desperately looking for services,” Neubauer said. “The current system isn’t working. It’s not keeping up in terms of funding. But we are making progress and I’m really proud of that and hope things will continue to improve as we move forward.”

Reynolds said they’re not done yet. Given the state’s surplus, she said she’ll be proposing additional income tax cuts in the next session.