FY25 Proposed Budget

January 5, 2024 Page 2

x 40 percent of the actual value of the property that exceeds $0 but does not exceed $20 million. x 35 percent of the actual value of the property that exceeds $20 million but does not exceed $55 million. x 25 percent of the actual value of the property that exceeds $55 million but does not exceed $500 million. x 20 percent of the actual value of the property that exceeds $500 million. 10-Year Financial Impact Projection for the City

Not Subject to State Backfill

Subject to State Backfill

Multi-Residential 3% Growth Com/Ind

Com/Ind

Com/Ind

Total Property Tax Reduction $ 1,321,240

Properties (1)

Limit

Rollback

Total

Rollback - Year 1 Rollback - Year 2 Total

FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

$

- -

$ 306,121

$

- - -

$ 306,121

$

1,015,119 1,017,657

$

-

$ 1,015,119

627,423 982,915

627,423

1,017,657 2,035,314

2,662,737 3,294,863 3,931,186 4,665,055 5,384,024 6,213,242 7,023,218 7,954,105 9,244,954

851,745

1,834,660 2,470,982 3,204,852 3,923,821 4,753,038 5,563,014 6,493,902 7,784,750

730,102 730,102 730,102 730,102 730,102 730,102 730,102 730,102

730,102 730,102 730,102 730,102 730,102 730,102 730,102 730,102

1,460,203 1,460,203 1,460,203 1,460,203 1,460,203 1,460,203 1,460,203 1,460,203

1,116,560 1,396,497 1,692,226 2,004,442 2,333,868 2,681,255 3,428,308

1,350,772 3,651 1,757,911 50,443 2,177,375 54,219 2,638,952 109,644 3,115,578 113,569 3,637,715 174,931 4,177,423 179,019

Total

$

15,504,902 20,772,185 $ $ 685,477 36,962,564 $

$

7,873,589 $

6,858,470 14,732,059 $

$ 51,694,623

(1) 3% annual value growth (2) At current property tax rate

Additional legislation During the 2021 legislative session, the State of Iowa legislature passed new legislation to phase out the State’s backfill payments to local governments for lost revenue due to the commercial and industrial rollback provisions of the 2013 property tax reform bill. Starting in fiscal year 2023, the City’s backfill payment from the State will be reduced by 20% per year until it is fully phased out in fiscal year 2027. During the 2022 legislation session, the State of Iowa legislature passed new legislation to convert the Business Property Tax Credit to a permanent rollback reduction on the first $150,000 of property tax valuation for all commercial, industrial and rail property owners. Currently, the State of Iowa is backfilling the losses to the City, which is estimated to be approximately $680,000 in fiscal year 2024. New legislation During the 2023 legislative session, the State of Iowa legislature passed new legislation (HF 718) which eliminates two levies, Library Levy and Emergency Levy, that the City was utilizing. These levies will be phased out by fiscal year 2029. This legislation also limits the growth of the General Levy. It does this by reducing the levy by approximately 2% if the taxable growth is 3% or greater and approximately 3% if the taxable growth is 6% or greater. Due to the amount of variables, we are not able to estimate future annual impacts, but once the levies are completely phased out, at current year taxable valuation, it is approximately $2.1 million property tax dollars annually.

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