Government

How new Iowa property tax bill impacts local cities - or not

(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gazette)
(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gazette)

Here is a closer look at how Senate File 634, which Gov. Kim Reynolds signed into law Thursday, might effect some communities:

Cedar Rapids

The past three budgets approved in Cedar Rapids allowed property tax revenues to increase 2.5, 4.6 and 6.1 percent, but the four budgets before that had increases of 1.16, 1.99, 1.89 and .56 percent, city data shows.

The growth in more recent years is tied to new construction and the release of revenue that had been sequestered in tax increment financing districts as the districts have sunset, Drew said.

The city holds a public workshop during the final stages of developing the budget, and then a public hearing before the City Council votes.

The plan also routinely passes unanimously.

Cedar Rapids had held its tax levy flat for 10 years before increasing it by 22 cents per $1,000 in taxable property value for fiscal 2020 to help pay for a flood control system. This would not fall under the law’s requirements because it is a debt service levy, he said, and not a property tax levy.

However, property tax revenue needs could increase — or force trade offs — someday after the flood system is built to cover the cost of maintenance, operate pump stations and keep up berms.

Preliminary numbers from the Cedar Rapids Assessor’s office show there were 260 appeals or protests of 2019 property value assessments, of which the Board of Review upheld 126 and denied 134. Additionally, the office handled 171 informal appeals as of May 1. The board has additional appeals left before adjourning Tuesday, said Julie Carson, Cedar Rapids Assessor.

Linn County

In Linn County, revenues have increased between 1.9 and 7.2 percent over the past five years.

The new rules would likely not have much affect on its Board of Supervisors — with only three members, it already takes a supermajority to pass measures.

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Supervisor Brent Oleson said that if the Legislature truly was concerned with property taxes, members would instead have regulated school boards because they have the largest impact on property taxes.

“What the Legislature did is just demagoguery,” he said. “There was no really rhyme or reason for this. If they wanted to attack property taxes, then they would’ve included school districts.”

The Linn County Assessor’s Office, which handles appeals in the county and communities other than Cedar Rapids, reports 492 formal petitions this year protesting property valuations.

Marion

In Marion, property tax revenue has increased between 3.16 and 7.69 percent over the past five years. In those years, all the budgets were passed unanimously with the exception of fiscal 2018. One council member voted no, council minutes show.

City Manager Lon Pluckhahn called it an “extremely complex issue” because of the Legislature’s previous decision to overhaul property tax classifications and rates.

“Overall, the 2012 property tax legislation shifted taxes away from commercial and multiresidential properties over toward residential, especially when combined with the increasing portion of residential properties subject to taxes at the same time,” he said in an email.

“One of the main issues with the legislation is that it does not differentiate between taxable value increases due to changes in the rollback, higher assessments and new construction.” Pluckhahn said. “Our new construction drives significant increases in taxes collected, and right now we don’t have a way to separate that from the other two.”

Johnson County

Concerns expressed by North Liberty’s mayor are not shared by other city officials interviewed in Johnson County.

Tiffin City Administrator Doug Boldt said he does not see the law significantly changing budget discussions in Tiffin. Boldt said he hasn’t been part of a budget process that hasn’t passed unanimously. And three budget work sessions are held in open session.

“I don’t know what’s going to change in all of that,” he said. “We have the public hearing, we pass it 5-0 and we move on to the next issue.”

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Tiffin Mayor Steve Berner said if city revenues did have to increase, he believes there would be a reason for it and the council would support that.

“I don’t think it would cause us much difficulty needing a super majority,” Berner said.

Berner’s biggest issue with the law is that he sees it as means for the state to exert control upon the cities.

“I don’t like that the state is trying to control us and I don’t know they necessarily need to be doing that,” he said.

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