FY25 Proposed Budget

this rate represents a 12% reduction in our property tax rate over the past decade, it is likely further reductions will not be possible in the coming years and failure to grow the City’s tax base could actually force property tax rates back upwards. Economic inflation has significantly impacted budgets while diminishing the City’s purchasing power. To address some of these acute challenges in the utility and enterprise funds, this budget includes several rate increases including a 5% Wastewater rate increase, 3% Water rate increase, $1/month Recycling rate increase, a $2.50 increase to the Landfill tipping fee, and several parking related fee and citation increases. Based on a flat property tax rate and the aforementioned utility rate increases, it is estimated in Fiscal Year 2025 a household with a $100,000 assessed home value will pay approximately $83 less per year (approximately $6.92 less per month) in taxes and fees for basic City services compared to the previous year (3.9% decrease). However, it is important to remember that assessed values of residential property have likely also increased for most residents. For example, if a $100,000 home’s assessed value increased by 20% between FY 2024 and FY 2025 then actual property taxes paid to the City will increase approximately $15 per year (as opposed to dropping $130 per year). The following bar chart illustrates the estimated overall financial impact of tax and fee changes to resident households. For simplicity purposes, the table uses $100,000 in assessed home value with no assessment growth so the reader may easily calculate tax payments based on their own home value.

Annual Financial Impact to Residential Households

-$500 $0 $500 $1,000 $1,500 $2,000 $2,500

FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025

Property Taxes

$900

$901

$869

$884

$848

$854

$724

Stormwater

$54

$60

$60

$60

$60

$66

$66

Refuse

$229 $433 $380

$229 $433 $399

$240 $433 $399

$240 $433 $419

$276 $433 $419

$300 $442 $436

$312 $464 $449

Sewer - 800 cubic feet Water-- 800 cubic feet

Total

$1,996 $2,022 $2,001 $2,036 $2,036 $2,098 $2,015 0.6% 1.3% -1.1% 1.8% 0.0% 3.0% -3.9%

Percent Change

Property Tax Overview The taxable valuation of property subject to all levies in Iowa City decreased approximately 0.4% in both Fiscal Years 2023 and 2024, despite assessed growth increasing approximately 5% over this same two-year period. This was driven largely by residential tax rollbacks imposed by the State which significantly reduced the taxable portion of residential properties. Prior to assessment

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