Cedar Rapids passes new budget with slight increase in property tax

Fee on gas and electric use increases, too

Rick Smith
Published: March 12 2013 | 4:30 pm - Updated: 28 March 2014 | 12:37 pm in

CEDAR RAPIDS — The City Council unanimously approved its budget for the fiscal year beginning July 1 that will raise the city’s portion of the average homeowner’s property-tax bill by 4.15 percent.

With the increase, the owner of a $100,000 house will pay $804 in property taxes to the city — about 40 percent of the total property-tax bill — in the new budget year, an increase of $31.

The Linn County Board of Supervisors also is planning a similar size increase in its portion of the local property-tax bill, while the Cedar Rapids school district on Monday said it won’t decide on its final tax request until sometime in April.

Homeowners, who pay tax on only a portion of the value of their property as determined by a state "rollback" formula, will pay tax on 52.8166 percent of a residential property’s value in the new budget year, up from 50.75 percent in the current budget year.

Commercial and industrial property owners, who pay tax on 100 percent of the value of their property, will not see a tax increase on the city portion of their property-tax bill.

At the City Council meeting on Tuesday, Mayor Ron Corbett said the city’s new budget represents "financial stability" at City Hall and provides a "consistency" of city services for the community.

Council member Kris Gulick, who is chairman of the council’s Finance Committee, noted that $3.8 million in revenue for the new $109 general-fund budget is coming from one-time revenue sources, such as local-option sales tax revenue, that won’t be available in the next budget year.

Gulick told City Manager Jeff Pomeranz and Casey Drew, the city’s finance director, that they were not "miracle workers" and so they had challenges ahead of them once the one-time revenue vanishes.

Council member Monica Vernon thanked Pomeranz for finding a way to incorporate into the new budget revenue to create five new positions to support the City Council’s initiative to reduce the number of nuisance properties in the city or as Vernon put it, "as we work to clean up our community."

The City Council has been able to balance the new budget by increasing the city’s franchise fee on electric and natural gas use from 1 percent to 2 percent, an increase that will bring in $8.1 million in the new budget year, up from $4.7 million in the current budget year.

The council has kept one of the determining factors of a person’s property-tax bill the same as it has been the previous four years, the city’s property-tax rate of $15.22 per $1,000 valuation. A person’s property taxes, though, can increase if the value of his or her property increases or if the state "rollback" formula protects less of a person’s property value from taxes.

Overall, the city’s taxable property value increased 1.16 percent, all of which came from an increase in residential property value. Commercial and industrial taxable value decreased about 1.5 percent for the new budget, according to the city’s figures.

The overall city budget — which has been much larger in recent years as federal and state flood-recovery dollars has flowed through the city — will be $501 million in the new fiscal year, down from the current budget of $646 million. The decline is coming as flood-recovery work is being completed, Finance Director Drew explained. This budget figure includes the $109-million, property-tax supported general fund, the city’s large fee-based enterprises such as water and wastewater and the remaining flood-recovery projects.

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