Property tax rate stays the same under Cedar Rapids proposal

CEDAR RAPIDS — Cedar Rapids homeowners would pay the same property tax rate next year and many could see their tax bills even decrease under a plan discussed this week by the City Council.

As proposed, the city’s levy rate of $16.6562 per $1,000 of taxable valuation would remain unchanged from this fiscal year. But the state is decreasing its residential rollback — meaning that rate will be applied to a smaller portion of a property’s value.

“We are happy to announce that the levy rate itself will remain unchanged for the (fiscal year) 27 period,” City Manager Jeff Pomeranz said. “If your house stays the same in value, you’re going to pay less in the city of Cedar Rapids and the rollback is really what’s driving that.”

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The rollback is set every year by the Iowa Department of Revenue. It determines how much of a home’s assessed value is subject to property taxes. The rate is designed to cap the total taxable value for homes and farms from increasing more than 3 percent. If aggregate property values for homes and farms increase more than 3 percent, their taxable values are "rolled back" so the total increase statewide is 3 percent.

For fiscal 2027, the rollback rate will decline to 44.53 percent from 47.43 percent.

A home valued at $200,000 without any change in assessed value in fiscal 2027 will see a decrease of $97 in annual property tax payments to the city.

The proposed tax levy’s impact on commercial/industrial property valued at $1 million shows a decrease by 0.5 percent in taxes paid, or $72 annually.

Cedar Rapids city officials met Wednesday at City Hall to review the proposed budget for fiscal 2027, which begins July 1 and runs through June 30, 2027. Pomeranz and Finance Director Abhi Deshpande presented the proposal to the council.

Cedar Rapids' total taxable valuation — excluding tax increment financing districts — increased 1.45 percent to $7.9 billion, up from $7.8 billion this fiscal year, according to the staff report. That includes all properties in the city.

A first public hearing on the budget will be held March 24. The second public hearing will be April 28, followed by a council vote to adopt the budget. Community comment will be welcome at each, although feedback can also be sent directly to city officials.

City to add new positions

The city’s general fund budget would increase by $10 million under the proposal, jumping to $178 million in from roughly $168 million the year prior. About 45-percent of the general fund income comes from taxes, the largest of any single funding stream.

The general fund is the city’s primary operating fund for routine business. City employee wages and benefits are expected to remain the highest expense to the fund, accounting for nearly 71 percent of expenditures.

“There’s certainly a commitment in this document to taking care of our employees in a proper way,” Pomeranz said. “We continue to do that and continue to enhance the job as funds are available.”

The proposed budget calls for the addition of multiple new city positions, including a mix of full- and part-time roles. Those include:

The Parks and Recreation Department is also budgeting for increased wages for seasonal employees to keep up with seasonal hirings elsewhere.

Water, sewer bills to rise

Rates for stormwater and solid waste, yard waste and recycling are proposed to remain unchanged, but rates for water and sewer would rise. Under the proposal, a typical residential customer would see a 5.8 percent increase for all utilities combined — about a $94.80 annual increase — to fund utility operations and capital improvements.

Among its planned $361 million in capital improvement projects, the city plans nearly $107 million in water pollution control improvements, $70 million in flood control system improvements and $39 million in improvements at The Eastern Iowa Airport.

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