Iowa City to abate taxes on flood land it buys

The City Council last night indicated the city will not pay taxes on flood-damaged properties it buys.

That's in contrast to flood victims, who have been told they must pay their property tax bills in full.

Jerry Anthony, whose home on Eastmoor Drive was damaged in last year's flood and is still vacant, said he is fine with the city's decision, but he thinks flood victims also should get a tax break.

“They should extend that same help to people who have been affected by the flood,” he said.

Private landowners like Anthony must ask their boards of supervisors for what is known as a property tax abatement. Linn County's supervisors OK'd abatements for flood victims there, but Johnson County's supervisors have consistently denied such requests.

The city, however, doesn't have to ask permission. And a majority of the City Council last night said it didn't want to pay taxes on the land it acquires through flood buyouts.

Mayor Regenia Bailey said, given the budget cuts the council has made, if the city doesn't have to pay the property taxes, it shouldn't.

“In light of some of the other decisions we've made, it makes sense not to,” she said.

When a city buys land, it goes off the tax rolls. But that occurs on July 1, so the city has to pay its share of the tax bill for the rest of the year.

Iowa City has 40 properties on its buyout list. It closed on seven homes before July 1 and hopes to acquire the rest by next spring.

City staff estimate the taxes it would owe at $37,000, with about 40 percent of that going back to the city and the rest going primarily to the school district and the county.

Tom Sass also lives on Eastmoor Drive and believes the city's decision will anger some of his neighbors. Because taxpayer money would be used to pay the property taxes, he doesn't have a problem with it.

“On one hand, it's not fair,” he said. “But on another hand, I can understand why they're doing it.”