Huge tax increase proposed for Iowa City school district

An Iowa City school district budget proposal for next fiscal year calls for a nearly 15 percent increase in the tax rate.

The initial draft of the budget for the year that starts July 1 includes a property tax rate of $16.30 per $1,000 of taxable value. That's up from $14.19 this year.

At the proposed rate, the owners of a $100,000 home would pay $764.93 on the school district portion of their taxes next year, compared with $646.97 this year.

The school board will review the budget proposal at its meeting Tuesday. It is scheduled to vote on the budget April 13, and it could make changes to the budget.

School officials said there's no denying that they are asking for a big increase in property taxes.

“I think we also have some unprecedented economic times,” said Paul Bobek, the district's executive director of administrative services.

The main problem, Bobek and Superintendent Lane Plugge said, is dwindling state aid. School districts were hit with a 10 percent across the board cut by the state last year, and federal stimulus dollars have been used to fill in for some state cuts.

Bobek said the district does not expect those cuts to be restored or for federal money to come in at the rate it did this fiscal year. The district also is assuming the state won't fully fund allowable growth, which is the amount of new money districts receive.

The district expects a $12.7 million shortfall in state funding next fiscal year.

Despite the large increase in the proposed tax rate, the district is not proposing much of an increase in spending. Rather, Plugge and Bobek said, it must make up the loss in state money with its main tool for generating revenue: property taxes

“I'll break it down real simple: We're not anticipating getting the revenue that we have in the past,” Plugge said.

School districts across the state are struggling financially. The Cedar Rapids school board is considering a budget that would increase the tax rate by up to $3.45 per $1,000 of taxable value.

The Iowa City school district has been making millions of dollars in cuts to its budget over the past several months.