FY2023 Adopted Budget

State Property Tax Reform Impact Summary On May 22, 2013, the State of Iowa legislature passed a property tax reform bill (SF295) that will have a significant impact on the City’s ability to finance services in the future. The property tax reform bill has multiple components; the specific provisions of bill SF295 that affect the City’s ability to finance services are briefly explained below along with an estimate of the future financial impact to the City’s operations. Residential Assessment Limitation Summary: For each assessment year beginning January 2013 and thereafter, SF295 reduces the limit of taxable valuation growth from 4 percent to 3 percent or whichever is lowest of the agricultural and residential classes. The City will not receive any money from the State due to Summary: For valuations at January 1, 2013, commercial and industrial property will be rolled back to 95 percent. For valuations at January 1, 2014, commercial and industrial property were rolled back to 90 percent. Thereafter, the two classes are taxed at 90 percent of their assessed value. The bill establishes a standing appropriation for the State to backfill losses to the City due to the commercial and industrial rollback beginning in Fiscal Year 2015 and then caps the amount at Fiscal Year 2017 levels. Multi-residential Property Summary: This provision establishes a multi-residential property classification that includes mobile home parks, manufactured home communities, land-leased communities, assisted living facilities and property primarily intended for human habitation containing three or more separate living quarters. Additionally, for buildings that are not otherwise classified as residential property, that portion of a building that is intended for human habitation can be classified as a multi residential property, even if human habitation is not the primary use of the building and regardless of the number of dwelling units. The following rollback percentages will be phased in over eight years, beginning in assessment year 2015 (fiscal year 2017). The projected loss will not be backfilled: lost revenue from this provision. Commercial & Industrial Rollback

• January 1, 2015 – 86.25% • January 1, 2016 – 82.50% • January 1, 2017 – 78.75% • January 1, 2018 – 75.00% • January 1, 2019 – 71.25% • January 1, 2020 – 67.50% • January 1, 2021 – 63.75% • January 1, 2022 and thereafter– same as residential property Telecommunications Property Taxation

Summary: This provision provides partial exemption of property used by companies in the transaction of telegraph and telephone business that is on a graduated percentage scale based upon the value of the property. This is phased in, with half in assessment year 2013 (Fiscal Year 2015) and the remainder being added in assessment year 2014 (Fiscal Year 2016). The projected loss will not be backfilled.

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