City officials across Linn County — except in Hiawatha — will get some help balancing their next general-operating budgets because the value of property in their cities on which property taxes are based has grown from a year ago.
Many of the small cities in the county have seen the highest percentage growth in value, which is the result, in part, of new assessments conducted by the Linn County Assessor’s Office.
By way of comparison, the county’s big city, Cedar Rapids, has seen its valuation to support the city’s general operation increase by 1.99 percent from a year ago to $5.87 billion. The City Assessor’s Office sets values in the city.
Elsewhere in the metro area, Marion’s valuation is up 3.4 percent, Robins’, 2.5 percent, and Fairfax’s, 1.7 percent while Hiawatha experienced a 1.4 percent drop in value to support its general operating budget.
Cindy Kudrna, finance director for the city of Hiawatha, said Hiawatha continues to grow, and she pointed to a different column of numbers in the annual valuation report by the Linn County Auditor’s Office released this week.
These figures include a jurisdiction’s additional value from property that has benefited from the economic development incentive called tax increment financing. That property does not generate property-tax revenue for use in a jurisdiction’s general operating budget. Instead, that tax revenue is forgiven for a number of years or is invested in specific infrastructure projects for a specific use, not general use.
With the value of TIF property factored in, Hiawatha’s valuation increased by 1.4 percent in the last year, Cedar Rapids’ by 3.1 percent, Marion’s by 3.2 percent, Fairfax’s by 8.5 percent and Robins’ by 9.6 percent.
In the new valuation report, the value of property in Hiawatha that benefits from a TIF incentive comprises 15.9 percent of the total taxable property value in the city compared to 6.6 percent in Cedar Rapids, 3.1 percent in Marion, 24.8 percent in Robins and 32.7 percent in Fairfax.
Jason Rabe, mayor of Fairfax, said TIF has served as a "good tool" for Fairfax and has allowed the city to invest in infrastructure improvements necessary for what he said is the fastest growing city in Linn County. Fairfax hasn’t use TIF incentives for hotels or shopping centers, but for street, water and sewer improvements, Rabe said.
Jeff Pomeranz, Cedar Rapids’ city manager, said that this week’s valuation report from the Linn County Auditor squared with what he said he and his budget staff had estimated in Cedar Rapids taxable growth, 2 percent.
Pomeranz said cities in Iowa face "significant pressures" as they work to prepare balanced budgets for the fiscal year beginning July 1, "so a small increase in value is certainly positive" for the city and will benefit the community," he said.
Revenues coming to local governments across Iowa also will benefit from a change in the state "rollback formula" on residential property, which will increase the percentage of residential property subject to property taxes by 3 percent, raising to 54.4 percent what is subject to tax.
At the same time, too, local jurisdictions are preparing for the state-mandated change in the rollback on commercial and industrial property, which will decrease property-tax revenue to local jurisdictions if the state does not replace the losses. The state also is reclassifying apartments to residential property from commercial property, which in the years ahead will cut into local government’s property-tax revenue.
Lon Pluckhahn, Marion’s city manager, said the latest valuation report, which showed a 3.4 percent increase in value for the city’s general fund budget, is a little higher than 2 percent that Marion has been accustomed to seeing.
"Anything higher than (2 percent) is a benefit," Pluckhahn said. "That’s tied to our new growth."
Mike Beimer, Mount Vernon city administrator, attributed Mount Vernon’s valuation increase of 9.1 percent to a complete commercial revaluation by the Linn County Assessor’s Office about a year ago. It had been many years since Mount Vernon’s commercial properties had been revalued, he said.
In Walker, Mayor Jane Benning reacted to Walker’s valuation increase of 14.5 percent as a taxpayer first, a city official second. She said she noticed that new valuations in Walker had raised her own home’s valuation and the valuations of others’ homes, which by itself would mean a higher property-tax bill for residents.
However, Benning said the city likely will decrease its property-tax bills to local taxpayers as it uses revenue from city’s 1-percent local-option sales tax for certain needs instead of property-tax revenue.
Budgets for local cities and counties must be finalized by March 15.
In this week’s Linn County Auditor valuation report, the total value of property for use in local school budgets increased by 3.13 percent, but the increase was larger in most small districts as it is with smaller cities in the county.The Cedar Rapids district had a valuation increase of 1.4 percent, the Linn-Mar district, 2.32 percent, the Marion district, 4 percent, and the College Community district, 5.8 percent.