M-8 - Budget Projections and Issues - FY 2022

Budget Projections & Issues 2021 Budget Workshops REVENUES • Property Tax System Basics ▪ The Rollback o Residential/agricultural property growth capped at 3% o Coupling provision for agricultural/residential o Commercial, Industrial, Railroad have separate rollback o Everything built on property valuations! ▪ Commercial/Industrial/Railroad Rollback o 90% rollback o Not tied to property valuation growth or decline o State backfill to be reduced, then eliminated o Info at IDOM: https://dom.iowa.gov/document/commercial-industrial-replacement-payments ▪ Multi-residential property class o First assessed in 2015 (affecting FY 2017 budgets) o 8 year rollback schedule o NO BACKFILL o Eliminated in FY 2024 <table> <tr> <th>Fiscal Year</th> <th>Rollback Percentage</th> </tr> <tr> <td>2017</td> <td>86.25%</td> </tr> <tr> <td>2018</td> <td>82.5%</td> </tr> <tr> <td>2019</td> <td>78.75%</td> </tr> <tr> <td>2020</td> <td>75%</td> </tr> <tr> <td>2021</td> <td>71.25%</td> </tr> <tr> <td>2022</td> <td>67.5%</td> </tr> <tr> <td>2023</td> <td>63.75%</td> </tr> <tr> <td>2024 and beyond</td> <td>Equal to residential</td> </tr> </table> • Rollback Numbers <table> <tr> <th>Property Class</th> <th>FY 2023</th> <th>FY 2022</th> <th>FY 2021</th> <th>FY 2020</th> </tr> <tr> <td>Agricultural</td> <td>89.0412%</td> <td>81.4832%</td> <td>56.1324%</td> <td>54.4480%</td> </tr> <tr> <td>Commercial</td> <td>90%</td> <td>90%</td> <td>90%</td> <td>90%</td> </tr> <tr> <td>Industrial</td> <td>90%</td> <td>90%</td> <td>90%</td> <td>90%</td> </tr> <tr> <td>Railroad</td> <td>90%</td> <td>90%</td> <td>90%</td> <td>90%</td> </tr> <tr> <td>Residential</td> <td>54.1302%</td> <td>56.4094%</td> <td>55.0743%</td> <td>56.9180%</td> </tr> <tr> <td>Multi-Residential</td> <td>63.75%</td> <td>67.5%</td> <td>71.25%</td> <td>75%</td> </tr> </table> • Property Tax Examples ▪ Residential property <table> <tr> <th>Assessed Value</th> <th>Rollback</th> <th>Taxable Value/Calculation</th> <th>Tax Obligation (city only)</th> </tr> <tr> <td>$100,000</td> <td>54.1302%</td> <td>(\$54,130/\$1,000) x \$8.10</td> <td>\$438.45</td> </tr> </table> ▪ Commercial/Industrial Property <table> <tr> <th>Assessed Value</th> <th>Rollback</th> <th>Taxable Value/Calculation</th> <th>Tax Obligation (city only)</th> </tr> <tr> <td>$100,000</td> <td>90%</td> <td>(\$90,000/\$1,000) x \$8.10</td> <td>\$729</td> </tr> </table>