Property-tax levy for education fails after debate over perpetual levy and CPI cap

The House defeated a second substitute to House Bill 230, a proposal to create a property-tax levy for education with an annual cap tied to the Consumer Price Index for urban wage earners (CPIW). Voting closed with 32 yes and 42 no votes, and the measure failed.

Sponsor Representative Steiler said the substitute was designed to limit year-to-year increases for homeowners on fixed incomes, inserting language that taxes "will not increase or decrease by any more than the annual change in the CPIW." He said the CPIW is the index used for Social Security cost-of-living adjustments and cited last year’s CPIW of 1.9% as an example of the likely cap.

Opponents argued the measure effectively creates a perpetual tax increase and changes the state's approach to taxation — including concerns about truth-in-taxation protections and unequal burdens on rural jurisdictions with limited sales tax bases. Representative Hughes warned members this is "a tax increase in perpetuity" and urged rejection; Representative Keiser and Representative Christiansen also warned it would disproportionately affect rural areas that rely on property tax.

Floor managers said the bill stabilizes revenue for the Uniform School Fund and that the portion affected is only a part of the total property tax bill (about 11% on average, the sponsor told colleagues), but the House ultimately rejected the substitute in a recorded vote.

Because the recorded floor debate included amendments and a full vote, the bill's defeat means the proposed levy will not move forward in its presented form.