Iowa City schools' property tax rate declining, but bills still going up

The Iowa City school board decided Thursday to lower the property tax rate next fiscal year, although tax bills will still increase.

The board voted 6-0 to set the tax rate at $14.59 per $1,000 of taxable value for the year that starts July 1, down from $14.69 this year. Gayle Klouda was absent from the meeting

At that rate, the owners of a $100,000 home would pay $708.19 in school taxes next fiscal year, up $19.11 from this year.

The higher bill results primarily from an increase in the state-set rollback, which determines the percentage of a residential property's value that is subject to taxation.

On Tuesday night, district administrators had recommended a rate of $14.40, but some school board members worried that would be too low given the uncertain K-12 funding proposals being discussed by the Legislature.

Republicans, including Gov. Terry Branstad, have proposed no increase in allowable growth, which is the amount of new state money districts receive. Democrats are seeking 2 percent.

Superintendent Stephen Murley on Thursday switched his recommendation to the $14.59 figure, saying that allows the district to levy for the difference between zero and 2 percent.

School Board member Toni Cilek said she recognized times are tough for taxpayers but said the board has an obligation to fund education, too.

“I think this is just a hair safer and still trying to recognize what we're trying to do for the taxpayers,” she said of the tax rate.

Murley said with Branstad talking about keeping allowable growth at zero next year too, the district is looking at up to a $5 million budget deficit a year from now.

The school district already is facing a $500,000 shortfall, in the best-case scenario, in the upcoming budget and has warned of layoffs. Property taxes do not affect a district's spending authority, so increasing the tax rate would not help with that.

The district's expenditures are not yet set because it's still negotiating with employee unions. Its spending authority for next fiscal year is estimated at $125.8 million.