M-8 - Budget Special Report - FY 2024-2025

BUDGET SPECIAL REPORT Fiscal Years (FY) 2024-25 Iowa’s property tax system will once again go through significant changes due to action taken by the Iowa Legislature and it is anticipated that city budgets will be directly impacted in the coming fiscal year and beyond. These changes, combined with previous legislation, will likely exacerbate local budget conditions that many city officials are concerned about. The League’s Budget Special Report contains the latest revenue and expenditure projections to aid city officials as they work through the annual budget process. It should be noted that the information detailed in this report is timely at publication and city officials need to continually monitor relevant data to make informed decisions. Table of Contents Revenues..................................................................................................................... 2 • Legislation approved in 2023 and in previous years made significant changes to the property tax system and will impact city revenues, including the creation of a new Combined General Fund Levy. Expenditures ............................................................................................................. 10 • The FY 2024 IPERS contribution rates for regular members will remain the same, as the employee rate will be 6.29 percent and the employer rate will be 9.44 percent. The contribution rate for protection class members will also hold steady with a 6.21 percent employee rate and a 9.31 percent employer rate. • The cost of many raw materials, goods and services showed more stability over the last year as the Consumer Price Index for All Urban Consumers (CPI-U) rose 3.7 percent from September 2022 to September 2023. Legislation.................................................................................................................. 14 • A review of legislation passed in 2023 that may affect city budgets. Other Budget Issues ................................................................................................. 15 Budget Calendar ....................................................................................................... 20 Web Resources ......................................................................................................... 23