Tax abatements costing Cedar Rapids over $2 million

The city is set to lose $2.1 million through property tax abatements in Linn County.

But while that amount might sound bad, city officials feared worse.

“It's not as bad as we originally projected,” Cedar Rapids Finance Director Casey Drew said.

Initial estimates hovered around $3.8 million, he said.

The Linn County Board of Supervisors this year decided that flood victims didn't have to pay taxes for the time they couldn't live in their damaged properties.

State law gives only county governments the authority to abate taxes, which fund city and county governments and school districts. Linn County stands to lose $546,631 because of the move.

However, because the vast majority of flood victims live in Cedar Rapids, the city takes the largest hit, at $2,119,794.

Linn County financial adviser Steve Tucker said workers had to input data for 3,000 different claims and had to use complex math programs to figure the total savings for each flood victim. Tucker said the work has taken from the deadline in October until now to come up with the final numbers, which he presented to the supervisors during their meeting Wednesday.

Drew said the city will most likely fund the revenue drop through reserves. He said the final decision is up to the City Council.

“They could look at, are there any service levels they'd like to reduce before the end of the year?,” he said. “Another option would be to increase the tax levy in the future to reimburse the city for what it has lost this past year.”

The abatements will cost the Cedar Rapids school district $1,262,618. The College Community schools will lose about $10,000 and the Springville district will lose about $13,000, according to Tucker.

-- Justin Foss, KCRG-TV9