School board looks at lower property tax rates

BY LUKE VOELZ | APRIL 13, 2011 7:20 AM

SocialTwist Tell-a-Friend

The Iowa City School District may decrease its property-tax rate for the 2011-12 school year below $14.69, less than both the current rate and the predictions made at previous meetings.

The School Board won’t decide on the exact rate until Thursday’s meeting, but it heard options Tuesday. District Executive Director of Administrative Services Paul Bobek recommended $14.40 per 100,000 of property value but presented three other options as well — $14.69, $14.16, and $14.59.

The different amounts take into account various outcomes for upcoming state funding and how the district’s general budget fares for the upcoming school year.

Bobek said he and district officials recommend the board adopt the $14.40 rate, because it would offer the best compromise between low tax rates for taxpayers and the district’s financial needs given an increase of 107 students for the upcoming school year. The School District receives about $5,900 per student through property tax and state aid.

Board members said they were concerned the $14.40 rate was risky because it assumed the district would receive state funding for 2 percent allowable growth rate and assumed the general fund budget for the upcoming year would break even. Board members said both were dangerous assumptions given the economic instability.

They said there is potential for unexpected district costs and the Iowa Legislature lagging in setting the allowable growth rate.

“Option 4 is betting on an accurate vestment of the year-end balance,” said board member Gayle Klouda, citing a difference of several million dollars between predictions and actual district spending between the months of December and February. “Things do change.”

Board member Tuyet Dorau said she agreed.

“For the past four years, we’ve levied less than what we’ve [initially] published,” she said. “I’ve wondered if that would be a conservative application given economic stability and funding from Des Moines. I’m a little uneasy given we’re not on a bus to economical recovery.”

Bobek said he is aware of these concerns but still recommended the $14.40 option. If the potential lower property-tax rates would not cover unexpected costs, he said, the board has the option of short-term borrowing from the $19 million in district funds earmarked for building the new Borlaug Elementary School. These funds are raised through sales tax as opposed to property tax.

“We’re trying to predict an absolute break-even,” Bobek said. “But that’s our risk, trying to balance the need for revenue with the needs of the taxpayer.”

He also emphasized that increasing the property tax would not help the district avoid layoffs due to budget cuts, because money raised by property taxes goes into the Iowa City School District’s cash reserves and not its spending authority, or the amount the state allows the district to spend.

The district’s $14.69 property-tax rate this year is the lowest of school districts in the Iowa United Education Network. The next lowest is the Cedar Rapids School District at $15.17, and the highest is Council Bluffs at $18.59.

> Share your thoughts! Click here to write a Letter to the Editor.

comments powered by Disqus

Privacy Policy (8/15/07) | Terms of Use (4/28/08) | Content Submission Agreement (8/23/07) | Copyright Compliance Policy (8/25/07) | RSS Terms of Use

Copyright © The Daily Iowan, All Rights Reserved.