FY2022

It is imperative to consider how the overall revenue and expenditure recommendations in this budget will impact local households and businesses. The proposed property tax rate is $15.67, the lowest Iowa City tax rate since Fiscal Year 2002. In Fiscal Year 2012, Iowa City's rate was one of the highest in the State of Iowa at $17.84. The Fiscal Year 2021 rate represents a 12.2% decrease over nine years. In recent years, tax levy rate reductions have been made possible predominantly through decreases in property taxes levied to repay debt. Based on a lower property tax rate and a previously approved 5% increase in the water rate, it is estimated that in Fiscal Year 2022 a household with $100,000 assessed home value will pay approximately $3 more per month, or $35 per year, in taxes and fees for basic City services compared to the previous year. The following bar chart illustrates the estimated overall financial impact of tax and fee changes to the average household in Iowa City . The table uses $100,000 in assessed home value so the reader may easily calculate tax payments based on their own home value.

$1,000 $1,500 $2,000 $2,500 Annual Financial Impact to Residential Households

$0 $500

FY2017

FY2018

FY2019

FY2020

FY2021

FY2022

Property Taxes

$922

$930

$900

$901

$869

$884

Stormwater

$54

$54

$54

$60

$60

$60

Refuse

$191 $433 $362

$205 $433 $362

$229 $433 $380

$229 $433 $399

$240 $433 $399

$240 $433 $419

Sewer - 800 cubic feet Water-- 800 cubic feet

*

Total

$1,962

$1,984

$1,996

$2,022

$2,001

$2,036

Percent Change

0.3%

1.1%

0.6%

1.3%

-1.1%

1.8%

*The FY2022 water rate includes a 5% increase which was originally approved in 2019 to take effect in FY2021 but was delayed to FY2022 due to the pandemic.

Perhaps the most significant property tax reform provision for Iowa City’s budget is the reclassification of multi-residential residential properties, none of which is subject to state backfill payments. Prior to assessment year 2013 (Fiscal Year 2015), multi-residential properties were classified as commercial and taxed at 100 percent of assessed value. The following graph illustrates the dropping taxable percentage of multi-residential properties in the coming assessment years.

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