Cedar Rapids homeowners face lower tax bills but more bus service

State rollback would offset rate increase for flood protection, city says

Cedar Rapids City Hall on the corner of 1st Avenue and 1st Street East. (file photo)
Cedar Rapids City Hall on the corner of 1st Avenue and 1st Street East. (file photo)

CEDAR RAPIDS — Public transit would see new evening hours and residential property owners could see a net tax decrease despite a 22-cent increase to the municipal levy as part of Cedar Rapids’ proposed fiscal 2021 budget, which was unveiled Thursday.

Because of the residential property tax rollback set by the state — under which residential property owners would pay only 55.07 percent of the total — homeowners are projected to see a decrease in their payments, according to the city.

For the city, that means less money for services such as police officers, firefighters, libraries and streets.

“While we’re taking a hit this year, from an overall community standpoint, from a residential perspective, it helps the homeowner,” Cedar Rapids City Manager Jeff Pomeranz said.

A $150,000 home would accrue $25 less in city property taxes over the year, assuming its value held steady, according to the city. Commercial and industrial properties have different variables, so a property valued at $1 million could see an increase of $198 or 1.43 percent over the year, according to the city.

The proposed $637 million budget, which is on track for adoption in March and would go into effect July 1, is up 12 percent or $70 million from the fiscal 2020 budget of $567 million. Of that, the general fund, which is supported by property tax revenue, is up 4 percent to $140 million.

Expanding the public transit system to include evening hours has been a long-standing request in the community.


The city would invest $904,000 to add weeknight service to all fixed-route bus routes, essentially running routes an additional two hours or until about 8:30 p.m.

To support this, the transit system would add eight positions and support additional overtime and call-in pay.

The hope is to have the expanded hours in effect by the start of next school year, said Brad DeBrower, Cedar Rapids Transit manager.

“More transportation options means more freedom to get around,” DeBrower said.

Council member Dale Todd applauded this, along with a new library policy to do away with fines and initiatives for at-risk youths.

“I am pleased to see, I would say, sort of a sensitivity to the changing social dynamics of our community,” Todd said. “This is real positive movement in my eyes. These are dollars well spent and I think we will see a return on investment.”

Under a new state law, because specific aspects within the property tax levy would increase by 2.82 percent — above a 2 percent soft cap — the City Council must hold a public hearing and pass a resolution of approval with support from a supermajority or three-quarters of the nine member council. That is scheduled for Feb. 25.

In the city’s justification, which also is required by the new law, the city cites increased contributions to retirement funds, employee medical benefits, public safety health expenses, vehicle and equipment maintenance, facility operating costs and technology upgrades.

The overall municipal tax levy would increase 22 cents for the second straight year, up to $15.66 per $1,000 in property value, generating $30 million earmarked for flood control as part of a previously introduced 10-year financing strategy. The levy would be lower than in Council Bluffs, Waterloo, Des Moines, Davenport, Iowa City and Sioux City, but higher than Dubuque and Ames.


Including other funding sources, $45.5 million is allocated for flood control initiatives, including a levee near the African-American History Museum of Iowa, a new restroom and storage facility incorporated into a flood wall near the McGrath Amphitheatre and design work on a new Eighth Avenue Bridge and westside flood protection.

Council member Scott Overland called it “a responsible budget that focuses on our priorities.”

A development slow down in fiscal 2020 seems to be reflected in the fiscal 2021 budget.

Taxable residential property values grew by only .69 percent, which is due in part to the rollback, and taxable commercial values grew .91 percent. The city’s use of tax increment financing as an economic development subsidy is projected to generate $13.8 million for earmarked use in fiscal 2021, but it also reduces the city’s overall taxable value, which helps fund citywide operations.

Multi-residential buildings, such as apartments, and industrial property growth, along with more revenue from utilities, helped balance out the taxable property value so that it increased 1.63 percent overall — still is a four-year low.

Cedar Rapids has $6.95 billion in net taxable value and $12.2 billion in overall assessed property value. The city’s debt is expected to grow to $310.6 million, which is about half of what the city is able to borrow.

The utility rate for water and sewer service would increase by 4.8 percent. A customer with average consumption and usage patterns — 7,500 gallons of water and sewer treatment a month — would see bills increase about $5 a month from $99.66 to $104.44.

Other highlights of the budget include an unspecified amount for construction and operation of a mini golf course at Twin Pines, $11,000 for a “Rollin’ REC Mobile” to bring activities to neighborhoods and $90,000 for a civil engineer position to support ongoing compliance with the Americans with Disabilities Act.

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