FY26 Proposed Budget

The following table shows a detailed breakdown of the City’s property tax asking for FY 2026 compared to the previous year. The total in property tax dollars levied by the City increases by 2.5% in FY 2026. Total property tax revenue is projected to be $71.2 million. This revenue source provides a third of total revenue and nearly two-thirds of general fund revenue, excluding transfers, in FY 2026. The following table also shows the increase in the Debt Service levy with an offsetting decrease in the Employee Benefits levy. Note that a property tax bill is a function of property value, the taxable percentage of the property as determined by the State, and local levy rates from all taxing bodies. Thus, most property owners’ tax bills will still increase despite the City’s stable tax levy rate.

FY2025

FY2026

LEVIES

Tax Rate per $1,000

Tax Rate per $1,000

Dollars

Dollars

General Fund Tax Levies: General

$36,792,773 $4,160,117 $1,578,392 $42,531,282

8.402 0.950 0.360 9.712 3.004

$37,755,850 $4,269,011 $1,619,708 $43,644,569

8.402 0.950 0.360 9.712 3.004

Transit

Tort Liability

Subtotal:

Agland Levy

$3,861

$3,685

General Fund Property Taxes

$42,535,143

$43,648,254

Special Revenue Levies: Employee Benefits

$14,644,268 $14,644,268 $11,636,020 $68,815,431

3.344 3.344 2.577

$14,653,761 $14,653,761 $12,282,983 $70,584,998

3.261 3.261 2.660

Subtotal:

Debt Service

Total City Levy Property Taxes:

15.633

15.633

% Change from prior year

4.74%

0.00%

2.57%

0.00%

SSMID Levy - Downtown SSMID Levy - South District

$544,919 $117,745

2.500 5.000

$543,274 $117,597

2.500 5.000

Total Property Taxes

$69,477,825

----

$71,245,869

Iowa City’s tax rate reflects enhanced levels of public services (e.g. full-time fire department, senior center, human rights, fare-free transit service, etc.), unique state and federal mandates (e.g. Chapter 411 public safety pension contributions), a lack of alternative revenue sources (e.g. local option sales tax, gaming, etc.), and other factors such as a significant number of University of Iowa affiliated tax-exempt properties within the jurisdiction.

FY2026 Municipal Property Tax Rates in Eastern Iowa North Liberty $11.37 Coralville $14.55 Iowa City $15.63 Cedar Rapids $16.47 Davenport $16.61

Past efforts to reduce Iowa City’s property tax rate have brought our community in alignment to the rates of other cities in Eastern Iowa. When compared to the ten largest cities in Iowa, Iowa City has moved from one of the highest tax rates in the state to the middle of the pack. Looking ahead, it is unlikely additional rate reductions will be possible in coming years, and rate increases could become necessary in response to the many competing financial stressors discussed throughout this transmittal letter.

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