Property taxes, eminent domain debate to return

Iowa lawmakers are heading into the 2026 legislative session with several new leaders — but many of the issues expected to take top priority are subjects left unresolved in 2025, namely eminent domain and property taxes.

Lawmakers presented legislation on both of these issues during the 2025 legislative session, but neither became state law. Republican leaders had brought up property taxes as one of their top concerns heading into the last session, but a measure failed to reach the governor’s desk.

Rep. Bobby Kaufmann, who is now House majority leader, and Sen. Dan Dawson, R-Council Bluffs, introduced legislation in 2025 to eliminate the state’s “rollback” system for calculating property taxes, calling for a move to a “revenue-restricted” system limiting levy rate growth alongside other changes. This proposal went through multiple iterations but failed to come to a floor vote.

While the push for action on property taxes was led by legislative leaders last year, Gov. Kim Reynolds has said she plans to introduce a proposal to lower property taxes in 2026. Over the past few months, she and other Republican leaders have held meetings with local government and community leaders across the state to discuss how to approach the subject.

The governor has warned that reducing property taxes could mean a reduction in local government services, saying in May that Iowans should not expect the “level of government that we have and expect the property taxes to go lower.” However, she said there are areas where services can be consolidated or streamlined in an effort to more efficiently use taxpayer dollars.

Reynolds also has said she is considering a property tax freeze for seniors as another strategy to ease Iowans’ economic burden.

“We have to see what the numbers look like,” Reynolds told reporters in November. “We can’t shift it to the state, that’s not property tax relief … it has to be sustainable.”

House Speaker Pat Grassley said House Republicans also are focused on tackling property taxes – saying the 2025 discussions on the issue were a “good lesson” in how to best craft legislation moving forward. He said “there’s going to be pieces of … the bills from last year that are probably not going to be included” in this year’s legislation. He said the caucus wants to present a plan that favors the taxpayer over the taxing entity, and one that is simplified from previous discussions.

“It needs to give certainty to the taxpayer, and at the same time, we need to make sure it’s something that’s understandable,” Grassley said. “Because every property tax conversation we’ve had for 20 years is very difficult, very in the weeds, very hard to understand. I think that’s why we’ve been unable to really get an overall reform of the system itself.”

Senate Minority Leader Janice Weiner said Democrats are willing to work across the aisle to address high property tax costs and echoed the state’s property tax system needs to be simplified and more transparent. However, she said Senate Democrats want to ensure tax relief is reaching the people in the most need, and that local communities can weather the reduced income.

“It’s really essential that local communities be at the table, because we can’t risk putting public safety and other really important things for local communities at risk – and they’re the ones who have to pay the bills, they’re the ones who are now facing the results of previous mandates,” Weiner said. “… And from what I’ve heard sort of across the state, they’re really frustrated. (Those) are the people who are doing the work in every city, in every county and every township, and they deserve to have a seat at the table.”

Senate Majority Leader Mike Klimesh says he expects to see bills on property taxes from the governor, House and Senate in 2026, and that the session will be spent discussing areas where all parties agree.

“At the end of the day, the conversation will be, ‘How deep in the weeds do we go?’” Klimesh said. “We have a 40-year-old system — do we slap Band-Aids on, right? My perspective is sometimes it’s going to take it down to the chassis and rebuild it from there. But at the end of the day, we’ll have to sit on a table and build a consensus.”

House Minority Leader Brian Meyer said House Democrats plan to roll out a property tax proposal in January, led by Rep. Dave Jacoby, D-Coralville, ranking member of the House Ways and Means Committee. The legislative proposal will focus on lowering residential property taxes while “protecting schools, protecting first responders,” he said.

Consensus on eminent domain remains elusive

Another issue carrying over from 2025 is how to address the use of eminent domain in carbon capture pipeline projects.

Legislation related to pipelines was approved by the Legislature in 2025. Sending the bill to Reynolds’ desk was a contentious journey. The measure only made it to floor debate in the Senate after 12 GOP senators signed a letter saying they would not vote on spending bills and allow the session to end until a measure on eminent domain was debated.

The Senate passed the bill in a 27-22 vote, but Reynolds vetoed the measure, saying the legislation combined “valid concerns with vague legal standards and sweeping mandates that reach far beyond their intended targets.”

There remains a strong push from Republicans calling for state lawmakers to address the subject, specifically to address some landowners’ issues with the Summit Carbon Solutions project. But some of the same concerns from Republicans, including the governor and Senate leaders, who opposed last year’s legislation, remain in play — meaning a consensus on how to tackle the property rights issue has yet to be reached.

Klimesh said he plans to introduce legislation within the first week of session that would allow companies to seek voluntary easements within a 10-mile radius of the corridor approved by the Iowa Utilities Commission in the permit process. This proposal, Klimesh said, would allow carbon sequestration pipeline projects to move forward without having to use eminent domain to build a pipeline against a property owner’s wishes.

“I think, at the end of the day, that allows me to exercise my property rights, by denying access to my property, it allows my neighbor to exercise their property rights by entering into a voluntary easement,” he told Republicans at the Westside Conservative Club.

This proposal was one of the suggestions offered in an amendment to the 2025 legislation by Sen. Mike Bousselot, R-Ankeny, which was not adopted during Senate debate.

This approach may differ from how Iowa House Republicans plan to tackle the subject. Grassley said House Republicans plan to introduce legislation next year focused specifically on the use of eminent domain. Under current law, property owners can be forced to allow easements on their land for projects considered in the public’s interest at a price set by a county compensation commission. Part of the dispute over carbon pipelines is whether the projects are in the public interest.

“Where I think we end up this session, whatever comes from the House, is going to be a little bit more tailored to eminent domain,” Grassley said. “I know the bill was a little bit broader than we passed over to the Senate last year, that the governor then vetoed. …The caucus, in the meantime, has recognized that that’s been where we’ve had our focus for the last several years – it’s been around eminent domain.”

The use of eminent domain in pipeline projects is not a party-line issue — the measures passed with both bipartisan support and opposition in both chambers in 2025.

Meyer said he does not see the proposal brought up by Klimesh on expanding the pipeline corridor as a way to put the issue to rest, saying he believes House Republicans will aim for more substantive action on eminent domain.

Meyer said he believes most Democrats understand there are competing interests in how to address the issue, as carbon capture pipelines are “an important part of the future of agriculture moving forward,” but that there are real questions on “how do we protect property rights” brought up by the projects.

Meyer said he believes there is a path forward to address this issue – but Republicans, who have held a trifecta of control at the Capitol for several years, will have to collaborate with Democrats to reach the finish line.

“We’re going to have to see where it goes,” Meyer said. “There’s a solution here. It’s just that they’re so used to not having to work with Democrats or anybody else.”

The legislative session is set to begin Jan. 12, 2026.