FY 2020 Budget

residential properties. If property values grew by more than 4 percent, the taxable value was rolled back to comply with the assessment limitation system. (Iowa League of Cities, Budget Special Report FY 2018-19) Commercial and industrial property were given their own rollback, which began at 95 percent for valuations established during the 2013 assessment year and 90 percent for the 2014 assessment year and thereafter. The rollback percentage for these properties will remain fixed at 90 percent regardless of how fast or slow the valuations grow. (Iowa League of Cities, Budget Special Report FY 2018-19) The legislature created a standing appropriation, beginning in FY 2015, to reimburse local governments for the property tax reductions resulting from the new rollback for commercial and industrial property. This “Backfill” was funded at 100 percent by the legislature for fiscal years 2015-2018 and cities receive these funds in a similar manner as property tax revenue. Future backfill appropriations are capped at the FY 2017 level. (Iowa League of Cities, Budget Special Report FY 2018-19) The following chart displays the history of the rollback in Iowa since its inception in 1978.

History of the Rollback

120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%

Agricultural

Residential

Commercial

Industrial

Multi-Residential

As the state faces budgetary uncertainty, there is concern the state will not make good on its promise to backfill the lost property tax revenue. These funds are utilized by the city to maintain vital city services and programs. Without the continuation of these funds, the city may be faced with the decision to increase the levy rate, cut services or both. Staff will continue to monitor actions being taken by the legislature with regards to funding of the backfill. Proposals were made in the 2018 legislation session that would have begun a three to five year phase out of the backfill, depending on a city’s recent valuation growth. This legislation did not pass prior to the end of the session, however new proposals have been brought forth in the current 2019 session that will eliminate the backfill. The budget, as presented, maintains the current staffing levels within each department with the exception of the Planning Department. Based on an upcoming retirement, staff is proposing to reorganize the department and add an additional full-time staff member. This will allow the Department to better handle the inspections, nuisance abatement and planning functions. City staff believes these levels represent the

11