Iowa Gov. Kim Reynolds signed Senate Bill 181 into law Feb. 20, making permanent the rollback fix for the state’s error in property tax numbers two years ago, according to a news release.
This bill means the assessment limitation for residential property will drop from 56.4919 % to 54.6501 %, and the deadline for cities to file their annual levies is delayed until April 30.
Although this does provide some tax relief for many property owners throughout the state, municipalities are questioning how they will be able to sustain their budgets and services in an already-tight economy.
Many of the proposed amendments to try and provide relief for cities, either through spreading out the adjustment over several years or using the state’s surplus to cover this year’s adjustment, failed to be passed with the bill. Practically all cities will have to totally rehash their budget to make cuts and fit within these new constraints.
The Johnston City Council, at its Feb. 21 meeting, discussed its annual tax levy. It held a public hearing for the maximum levy rate, which amounted to $15.244 million for this year, or $2.2 million above the previous year.
This is only a ceiling imposed on the levy, and the city plans to bring the final rate down to an amount just under $14 million, a roughly $880,000 increase from the previous year.
The city has not received updated values from the county assessor for its new budget, but it has estimated the upcoming levy to be $10.98 per $1,000 taxable value, which could be an increase of 3.8% or less in tax rates for homeowners.
There was some public input from residents, who urged council to keep tax rats as low as possible, as it is a barrier for a lot of residents and people who want to work or live in the area. The council will continue to work with its levy and budget over the next two months until the deadline of April 30.
“The city does not intend to approve the final budgets at these [maximum] rates, but rather, due to that legislation and other legislation that’s moving through the process, this allows the city to react to them through our budget process,” said Johnston City Administrator Mike Pogge-Weaver. “This was, in part, recommended by the Department of Management that we needed to continue our budget process even with the legislative uncertainty that was out there.”
