New construction, higher property values allow Cedar Rapids City Council to keep tax levy rates unchanged

CEDAR RAPIDS - The Cedar Rapids City Council elected to keep the city's property tax levy the same for the ninth year in a row when it approved the fiscal 2018 budget.

However, a state increase and a rise in property values could cost residents more in taxes.

The budget, which goes into effect July 1, keeps the property tax levy flat for the ninth year, at $15.22 per $1,000.

But because of a 2014 Iowa Department of Revenue 'residential rollback,” the percentage of an owner's property that is subject to tax increases from 55.63 percent to 56.94 percent in fiscal 2018. This means that a homeowner whose property is valued at $150,000 will pay $30 more.

The city was able to keep the property tax levy rate the same due to an increase in property values from new construction. With the increase in value, property tax revenue to the city also will increase.

Because of $150 million worth of new construction, the total assessed property value in Cedar Rapids totals more than $10.3 billion.

About two-thirds of that value is taxed, or $6.38 billion, in the city's case. This means the city will see a 3.6 percent increase in property tax revenue.

'One of the reasons we were able to do that is because we really focused on growing the tax base in Cedar Rapids,” Mayor Ron Corbett said. 'You can't help but drive around and see new development. That lessens the burden for everybody else.”

An increase in property tax revenues and decreases to the city's golf department make up for a loss of $3 million in traffic camera revenue and other personnel costs.

'We elected to do that based on some of the political responses,” Corbett said. 'So far, they haven't addressed that issue on the floor of the Senate or House, but we thought it was prudent not to budget for that. We'll have to deal with the consequences of whatever happens.”

The city also plans to make fewer debt payments after most 2008 flood recovery projects are wrapping up, causing a $35 million decrease to the flood recovery funds.

Overall spending is down 2 percent, or $9.3 million, from $525.4 million to $516 million.

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