Marion’s fiscal 2025 budget bumps staff pay, improves infrastructure

While Iowa communities grapple with property tax reform that state lawmakers passed last year, Marion’s fiscal 2025 budget bumps staff pay and invests in infrastructure improvements.

Overall, total city expenditures in fiscal 2025 — which spans July 1 through June 30, 2025 — are budgeted at $177.586 million. Marion is slated to generate about $150.3 million in revenue under a budget passed last week by the Marion City Council. The revenue and expenditure budgets include the general fund — which uses property tax dollars to fund entities such as parks and recreation, public safety and community development — as well as other funds such as all capital funds, the Water Department and other enterprise funds.

The city approved a $14.803 property tax rate, which is expected to generate an additional $2.1 million in revenue. The rate is down from the current $15.03.

Under the new city levy rate, the owner of a house with an assessed value of $200,000 would see an approximately $1,372 annual city tax bill. This does not include other taxing authorities such for schools or for Linn County government.

The state-set residential rollback rate — the percent of a home’s value that can be taxed — hit its lowest point since 1979, falling to 46.3 percent. That means residents’ assessed home values would need to have risen more than 19.75 percent for homeowners to see an increase in the city portion of their property tax bill.

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After state lawmakers last year passed House File 718 with bipartisan support, the city’s taxable valuation grew 9 percent and totaled $2.05 billion in 2023. Based on the legislation to keep tax bills down, however, the city captured only about 6 percent of that valuation growth. The bill set triggers to reduce the levy by certain amounts if valuation growth is 3 percent or more.

In recent years, Marion has implemented a zero-base budget process to ensure “greater scrutiny and more productive use of taxpayer dollars,” according to the city.

The adopted operating budget includes the following investments:

The city will fill two vacant police officer positions that were left open last year so it could fund unplanned wage bumps to help Marion Police Department recruitment. An upgrade to a recently vacated administrative position within the Fire Department also was included, which Finance Director Lianne Cairy said “will help with reporting and other Fire initiatives.”

With work underway on Marion’s approximately $7.3 million Central Plaza project to transform City Square with a new Central Plaza, project implementation also was included in the budget. The city in February kicked off the public portion of the capital campaign to raise $1.3 million and already had secured more than $850,000.

Staffing for the $400,000 mobile library will allow the city to take books, technology and other services directly to undeserved areas and senior facilities, “ensuring equity and maximizing the public impact” of the library, Mayor Nick AbouAssaly previously said. This comes after the new Marion Public Library opened in November 2022.

To maintain competitive wages and benefits for city employees, the budget covers increases to the non-bargaining wage scale by 4 percent total — 2 percent as a cost-of-living boost, plus a 2 percent merit raise — in July 2024. This recommendation is in line with the city’s recently completed compensation study. Bargained increases for the city’s union members also were included, as well as pay bumps recommended in the study for part-time staff.

Retirement costs fell for the Municipal Fire and Police Retirement System of Iowa, which provides pension benefits to Iowa’s local public safety personnel. The employer contribution rate will drop from 22.98 percent in fiscal 2024 to 22.66 percent in fiscal 2025.

Marion’s capital improvement program included $21 million in streets and $20 million in sewer improvements. Funding for capital projects comes from the 1 percent local-option sales tax, grants, general-obligation bonds and other pay-as-you-go funds.

The city budgeted a total of $63.7 million on capital expenditures in fiscal 2025, including:

“This is the result of a much more mature milestone-based series of actions that you all have worked against for well over a year …” council member Grant Harper said of the budget.

AbouAssaly said he appreciated the thoughtful planning that went into the budget.

“It’s really a major step in our growing up process as a city,” he said.

Comments: (319) 398-8494; marissa.payne@thegazette.com