Iowa City school district proposes tax rate decrease next school year

IOWA CITY – The tax rate would go down next fiscal year, but taxes would increase slightly for homeowners in the Iowa City school district under a budget proposal released Thursday.

Administrators are recommending a tax rate of $14.13 per $1,000 of taxable value for the year that starts July 1, down from this year's $14.59.

But the rollback, which is set by the state and is the percentage of a residential property's value that is taxed, is increasing from 48.53 percent to 50.75 percent.

That means that under the budget proposal, the owner of a $100,000 home would pay $716.97 next year in school taxes, up from $708.08 this year.

The school board is scheduled to review the budget at its March 6 meeting. A public hearing and adoption of the budget are expected April 3.

The district's maximum budget authority, what it's allowed to spend, is expected to be $129.9 million, up from $125.8 million this year.

Superintendent Stephen Murley said that amount is enough for the district to cover its expenses. The district has dealt with budget shortfalls the past couple of years, but it's projected to be in the black the next two years.

Looking five years out using forecasting software, the district projects a $46,000 deficit in the 2014-15 school year and then deficits of $1.4 million and $2.8 million the following two years, respectively.

Murley said the reason for the shortfalls is that the district's expenses increase 3 percent to 3.5 percent annually and administrators are assuming the state will put allowable growth, which is the amount of new money district's receive, at 2 percent annually in the coming years, the same as what has already been set for next fiscal year.

Murley said the district is reviewing its internal operations to see how it can become more efficient, and if those savings are not enough, program and staff cuts are possible.

But Murley said the deficit projections are at the high end and his experience suggests those are likely to come down. The district also is forecasting a combined $4.1 million surplus the next two years, which could help offset any deficits, he said.