FY26 Proposed Budget

It is also imperative to consider how the overall revenues and expenditures in this budget will impact local households and businesses. The property tax rate remains unchanged at $15.63. Although this rate represents a 12% reduction in our property tax rate since FY 2012, it is unlikely further reductions will be possible in the coming years and failure to grow the City’s tax base in the headwinds of continual property tax reform efforts could force property tax rates

Other Financial Sources 7% All Revenue Sources (FY 2026)

Misc. 5%

Property Taxes 33%

Charges for Services 23%

Other City Taxes, 4% Licenses & Permits, 1% Use of Money & Prop, 2%

Intergovernmental 25%

back upwards. Economic inflation has significantly impacted budgets while diminishing the City’s purchasing power. To address some of these acute challenges, this budget includes several rate increases including a 3% water fee rate increase, a new $2.00 sticker fee per extra bag or bundle of yard waste outside of the yellow organics bin, a $5.00 minimum landfill yard waste fee, and a 1% gas and electric franchise fee increase. Based on a flat property tax rate and the anticipated utility rate increases, a household with a $100,000 assessed home value will pay around $30 more per year (i.e. $2.54 more per month) in taxes and fees for basic City services in FY 2026 compared to the previous year, an increase of 1.5%. However, it is important to remember that assessed values of residential properties likely increased for most residents during reassessment years (odd numbered years). Other factors, such as property homestead exemptions or participation in the City’s low-income utility program, will also affect actuals. The following chart illustrates the estimated overall financial impact of tax and fee changes to Iowa City households. Note this does not reflect the 1% utility franchise fee. The table uses $100,000 in assessed home value with no assessment change 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

FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 $900 $901 $869 $884 $848 $854 $724 $742

Property Taxes

Stormwater

$54

$60

$60

$60

$60

$66

$66

$66

Refuse

$229 $229 $240 $240 $276 $300 $312 $312 $433 $433 $433 $433 $433 $442 $463 $463 $380 $399 $399 $419 $419 $436 $449 $462 $1,996 $2,022 $2,001 $2,036 $2,036 $2,098 $2,015 $2,045 0.6% 1.3% -1.1% 1.8% 0.0% 3.0% -4.0% 1.5%

Sewer - 800 cubic feet Water-- 800 cubic feet

Total

Percent Change

19