M-8 - Budget Projections and Issues - FY 2022

• Road Use Tax Fund Distribution ▪ Funded by fuel taxes and vehicle registration fees ▪ 10 cent/gallon gas tax increase approved in 2015 legislative session for critical infrastructure needs ▪ Additional $215 million for RUTF ▪ Distribution data: www.iowatreasurer.gov/for-governments/roadusetax <table> <tr> <th>Fiscal Year</th> <th>Iowa Dot Per Capita Forecast (November 2021)</th> </tr> <tr> <td>FY 2022</td> <td>$125.50</td> </tr> <tr> <td>FY 2023</td> <td>$126.50</td> </tr> <tr> <td>FY 2024</td> <td>$127.50</td> </tr> <tr> <td>FY 2025</td> <td>$128.00</td> </tr> <tr> <td>FY 2026</td> <td>$129.00</td> </tr> </table> • Local Option Sales Taxes ▪ Iowa Department of Revenue forecast = 16.9% increase ▪ Must adopt revenue purpose statement (including amount used for property tax relief, if any) ▪ Sunset clause is optional ▪ Helpful tools available at: www.tax.iowa.gov/local-option-tax-information-local-government • Hotel/Motel Tax ▪ 168 cities in 2021 ▪ May charge up to 7% (if approved by voters) o 16 cities charge less than 7% ▪ 50% must be used for improving recreational, cultural or entertainment facilities OR for promotion of tourist/convention business ▪ FY 20 showed decrease of 14.15% (estimates not currently available for FY 2021/FY 2022) • Franchise Fees ▪ ~215 cities ▪ May charge up to 5% ▪ Must hold public hearing prior to increasing or amending fee + must adopt and publish (or post) a revenue purpose statement ▪ Cannot charge both LOST and a franchise fee II. EXPENDITURES • Consumer Price Index ▪ Measures change in prices for goods and services ▪ U.S. CPI – Increased 5.4% (Sept ‘20 – Sept ‘21) ▪ Midwest CPI – Increased 5.7% (Sept ‘20 – Sept ‘21) • Employment Cost Index ▪ Measures change in cost of labor ▪ State and Local Government Workers (Sept ‘20 – Sept ‘21): o Total Compensation costs increased 3.7% • IPERS Contribution Rates o Regular Class Members <table> <tr> <th>Fiscal Year</th> <th>Employee</th> <th>Employer</th> <th>Total Rate</th> </tr> <tr> <td>2021</td> <td>6.29%</td> <td>9.44%</td> <td>15.73%</td> </tr> <tr> <td>2022</td> <td>6.29%</td> <td>9.44%</td> <td>15.73%</td> </tr> <tr> <td>2023</td> <td>6.29%</td> <td>9.44%</td> <td>15.73%</td> </tr> </table> o Protection Class Members <table> <tr> <th>Fiscal Year</th> <th>Employee</th> <th>Employer</th> <th>Total Rate</th> </tr> <tr> <td>2021</td> <td>6.41%</td> <td>9.61%</td> <td>16.02%</td> </tr> <tr> <td>2022</td> <td>6.21%</td> <td>9.31%</td> <td>15.52%</td> </tr> <tr> <td>2023</td> <td>6.21%</td> <td>9.31%</td> <td>15.52%</td> </tr> </table>