Iowa City School District Tax Rate May Increase

By Gregg Hennigan, Reporter

IOWA CITY, Iowa – The Iowa City Community School District may raise its tax rate for the first time in three years, but by how much is not yet known – and the tax rate ultimately could remain unchanged.

The school board Tuesday night approved the publication of a budget that includes a tax rate, suggested by administrators, of $13.81 per $1,000 of taxable valuation for the fiscal year that starts July 1. This year's rate is $13.69.

But Craig Hansel, the district's chief financial officer, said the district is waiting for information from the state on income surtax revenue and history indicates there will be enough growth to bring the tax rate close to this year's, perhaps a penny or two higher.

"I think you can feel pretty good about where you are going with this" tax rate, he said.

The district must publish its budget prior to a public hearing, and the school board voted 6-0, with Patti Fields absent, to do that with the $13.81 tax rate. The board can lower the tax rate after the budget is published.

The school board is to hold a public hearing and vote on the budget April 8.

Administrators have said the district must cut $3.6 million to make up for a budget shortfall and to get its unspent balance in a healthier position. They want to make that up by reducing staff through not filling open positions and increasing the smallest class sizes. Layoffs are a possibility, Superintendent Stephen Murley has said.

Board member Chris Lynch seemed to address the cuts when he talked about the "adjustments" the district needed to make.

"I think it's a necessary step because we're having to react to the situation," he said. "I'd like to see us get more proactive."

At the tax rate to be published, the owner of a $250,000 home would pay $1,811 in school taxes next fiscal year, up $70.24 from this year.

Even if the tax rate were unchanged, homeowners would still pay more because the state-set rollback, which is the percentage of a home's value that is taxed, will increase next year.

The owner of a $500,000 commercial property would pay $6,560 in school taxes. That's $284 less than this year, but a change in state law means only 95 percent of a commercial property's value will be taxed rather than 100 percent.

The district's current tax rate ranks 22nd among the state's 25 largest school distric
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