Fiscal Year 2009 Property Tax RateTO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Fiscal Year 2009 Property Tax Rate
DATE: June 11, 2008
After the City Council passed this year's budget in March, it was submitted to the State.
The budget generated a certain amount of general fund revenues, including a property
tax levy of $10.09 per thousand dollars of assessed valuation, which was a 4% increase
in property taxes for the average homeowner.
The State reviewed the submittal, and after reviewing the assessed valuations prepared
by Dubuque County Auditor Denise Dolan, determined that the City's assessed
valuation was higher than the State originally represented. The higher assessed
valuation means that with a lower property tax rate, the City can generate the same
amount of general fund revenues. Therefore, the State lowered the City's property tax
rate from $10.09 per thousand to $9.97. The City will receive the same amount of
property tax revenue as originally anticipated.
This means that the average homeowner will see a 2.76% property tax increase,
instead of a 4% increase. Commercial property taxpayers were going to see a 2.47%
decrease and will instead see a 3.63% reduction. Industrial property taxpayers would
have received a 2.2% reduction, but will now see a 3.37% reduction.
Dubuque's adjusted City property tax rate ($9.97) is the lowest in the State, as
compared to the Fiscal Year 2009 rate for the other cities in the State of Iowa with a
population over 50,000. The highest ranked city (Sioux City - $18.71) is 88% higher
than Dubuque's rate, and the average ($16.02) is 61 % higher than Dubuque.
Tax Rate Comparison for Iowa's Largest Cities
Rank City Tax Rate
10 Sioux City $18.71
9 Waterloo $18.37
8 Council Bluffs $18.08
7 Iowa City $17.72
6 Des Moines $17.18
5 Davenport $15.58
4 Cedar Rapids $15.07
3 West Des Moines $12.38
2 Ames $11.06
1 Dubuque $ 9.97
Average Without $16.02
Dubuque
I concur with the recommendation and respectfully request Mayor and City Council
approval.
V
2 ~~
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Jennifer Larson, Budget Director
TO: Michael C. Van Milligen, City Manager
FROM: Jennifer M. Larson, Budget Director
SUBJECT: Fiscal Year 2009 Property Tax Rate
The Iowa Department of Management notified the City of Dubuque that the Fiscal Year 2009
property tax valuations increased from $1,779,297,458 to $1,800,795,871 which required the
City's Fiscal Year 2009 tax rate to decrease from $10.0895 to $9.96904.
The adjustment to the City's Fiscal Year 2009 tax rate does not impact the amount of tax
dollars received by the City. Since the adjustment by the Department of Management
resulted in higher property tax valuations, the lower tax rate of $9.96904 will produce the
same amount of property tax revenue as projected during the Fiscal Year 2009 budget
process.
The Budget and Fiscal Policy Guidelines for Fiscal Year 2009 adopted by City Council had
the following impact to taxpayers:
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Impact to Average +$20.43 / +$34.20 / +$56.25 / +$51.35 / +$40.42 /
Homeowner +4.00% +6.44% +9.95% +8.26% +6.01
Impact to -$91.00 / - -$104.11 / -$117.13 / +$64.32 / -$52.81 /
Commercial 2.47% -2.89% -3.35% +1.91 % -1.91
Impact to Industrial -$136.33 / -$190.83 / -$86.74 / -$1.80 / -$88.55 /
-2.20% -3.15% -1.48% -0.03% -1.53%
The adjusted Fiscal Year 2009 City property tax rate by the Department of Management has
the following impact to taxpayers:
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
Impact to Average +$14.09 / +$33.85 / +$55.83 / +$51.04 / $40.24 /
Homeowner Attach.l +2.76% +6.45% +10.00% +8.31 % +6.05%
Impact to Commercial -$133.95 / - -$102.58 / -$114.39 / +$65.04 / -$51.02 /
Attach. II 3.63% -2.89% -3.31 % +1.95% -1.50%
impact to Industrial -$208.54 / - -$188.06 / -$83.41 / +$0.66 / -$85.55 /
Attach. III 3.37% -3.15% --1.44% +.01 % -1.50%
The biggest impact to property tax classes is in FY 2009 due to the increase in the taxable
valuations and the decrease in the tax rate. In the outer fiscal years of FY 2010 - FY 2013,
the impact of the valuation increase is minimal since FY 2010 is compared to FY 2009 which
has already been adjusted for the valuation change.
Dubuque's adjusted City property tax rate ($9.97) is the lowest in the State, as compared to
the Fiscal Year 2009 rate for the other cities in the State of Iowa with a population over
50,000. The highest ranked city (Sioux City - $18.71) is 88% higher than Dubuque's rate, and
the average ($16.02) is 61 % higher than Dubuque.
Tax Rate Comparison for Iowa's Largest Cities
Rank City Tax Rate
10 Sioux City $18.71
9 Waterloo $18.37
8 Council Bluffs $18.08
7 Iowa City $17.72
6 Des Moines $17.18
5 Davenport $15.58
4 Cedar Rapids $15.07
3 West Des Moines $12.38
2 Ames $11.06
1 Dubuque $ 9.97
Average Without $16.02
Dubuque
I have attached various pages from the Fiscal Year 2009 Citizen's Guide that has been
impacted by the change in the FY09 tax rate (Attachments IV - IX).
JML
Attachments
cc: Barry Lindahl, Corporation Council
Cindy Steinhauser, Assistant City Manager
Jenny Larson, Budget Director
City of Dubuque 06/06/08 Average Average Percent of Percent of
Property Tax By Class Taxpayer Taxpayer Roll Backed Roll Backed
__ ~_ Percentage Dollar Value Value Equalization
Change Change w/o Equal. w/equaliz Order
IMPACT ON A VERAGE RESIDENTIAL PROPERTY--EXAMPL E Attachment I
PROJECTION
FY 2009 Assessed Value $ 116,368 +12.03% revaluation 12.03%
E uafization Order 12.03%
Taxable Value 130,367
__ Rollback Factor 0.440803 -3.25%
Taxable Value $ 57,466
1o.oass Tax Rate 9.96904
Gross "Ci "Pro art Tax $ 572.88
(Assume 100% Homestead Tax Credit 48.35
Funded) Ad'ustment to Homestead 0.00
Net "Cit "Pro art Tax
$
524.53
2.76%
$14.08 _
FY 2010 Assessed Value $ 130,367
Rollback Factor 0.480803 9.07%
Taxable Value $ 62,681
9.6553 Tax Rate 9.6553
Gross "Cit "Propert Tax $ 605.21
Homestead Tax Credit 46.83
Ad'ustment to Homestead 0.00
Net "Cit "Propert Tax $ 558.38 6.45% $33.85
FY 2011 Assessed Value $ 130,367
Equalization Order 2.70% 1) Used average equalization order change of 2.70%
Taxable Value _ 133,887
Rollback Factor
0.518303 _
7,80%
Taxable Value, $ 69,394.07
s.slso Tax Rate 9.516
Gross "Cit "Pro art Tax $ 660.37
Homestead Tax Credit - 46.15
Ad'ustment to Homestead 0.00
Net "Cit " Pro a Tax
$
614.21
10.00%
$55.83 ___
FY 2012 Assessed Value $ 133,887
Rollback Factor 0.558303 7.72%
Taxable Value $ 74,750
9.5173 Tax Rate 9.5173
Gross "Cit "Pro art Tax _
$
711.41 _
Homestead Tax Credit 46.16
Ad'ustment to Homestead 0.00
Net "Cit 'Pro art Tax $ 665.25 8.31 % $51.04
FY 2013 Assessed Value $ 133,887
E ualization Order __
2.70%
__ _
1) Usetl average equalization order change of 2.70°/.
Taxable Value 137,502
Rollback Factor 0.598303 7.16%
Taxable Value $ 80,105
9.3746 Tax Rate 9.3746
Gross "Cit "Pro art Tax $ 750.95
Homestead Tax Credit - 45.47 _
Ad'ustment to Homestead
0.00 _
Net "Cit 'Pro art Tax $ 705.49 6.05% $40.24
Page 1
City of Dubuque 06/06/08 Average Average Percent of Percent of
Property Tax By Class Taxpayer Taxpayer Roll Backed Roll Backed
Percentage Dollar Value Value Equalization
Change Change w/o Equal. wlequaliz. Order
IMPACT ON COMMERCIA L PROPERTY - EXAMPLE Attachment II
PROJECTION
FY 2009 Taxable Valuation $ 357,535.86
Rollback Factor
0.997312
__ _
Taxable Value 356 574.80
Tax Rate 9.9690
"Ci 'Pro ert Tax $ 3,554.71 -3.63% $133.94
FY 2010 Taxable Valuation $ _ 357,535.86 _
Tax Rate
9.6553 _ _ _ _
"Ci 'Pro ert Tax $ 3,452.13 -2.89% ($102.58
FY 2011 Taxable Valuation $ 357,535.86
Rollback Factor 0.981
Taxable Value ____ 350,742.67
Tax Rate
9.5162 _ _
"Ci 'Propert Tax $ 3,337.74 -3.31% $114.39)
FY 2012 Taxable Valuation $ 357,535.86
Tax Rate 9.5173
"Ci "Propert Tax $ 3,402.78 1.95% $65.04
FY 2013 Taxable Valuation $ 357,535.86
Tax Rate 9.3746
"Cit 'Pro ert Tax $ 3,351.76 -1.50% $51.02
Page 1
City of Dubuque 06/06/08 Average Average Percent of Percent of
Property Tax By Class Taxpayer Taxpayer Roll Backed Roll Backed
Percentage Dollar Value Value Equalization
Change Change w/o Equal. w/equaliz Order
IMPACT ON INDUSTRIAL P ROPERTY -EXAMPLE Attachment III
PROJECTION
FY 2009 Taxable Valuation $ 599,500.00
Tax Rate 9.9690
"Cit 'Pro ert Tax $ 5,976.44 -3.37% 208.51)
FY 2010 Taxable Valuation $ 599,500.00
Tax Rate
9.6553 _
"Ci " Pro a Tax $ 5,788.38 -3.15% 188.06
FY 2011 Taxable Valuation $ 599,500.00
Tax Rate 9.5162
I
"Ci "Prope Tax $ 5,704.96 -1.44% 83.41
'
FY 2012 Taxable Valuation $ 599,500.00
Tax Rate
9,5173 _
"Ci "Prope Tax $ 5,705.62 0.01% 0.66
FY 2013 Taxable Valuation $ 599,500.00
ax ate
9.3746 ___ ._--
"Ci 'Pro ert Tax $ 5 620.07 -1.50% 85.55
Page 1
Attachment IV
IMPACT OF BUDGET ON CLASS OF PROPERTY
RESIDENTIAL
$535
$530 N
~
$525
$520
$515 ~ °
~
$510 ~
$505 ~
N
$500 ~p
`~
~
$495 t
$490
2005^ 2006^ 2007^ 2008^ 2009
^ City Property Tax paid by the average homeowner
^The State of Iowa has underfunded the Homestead Property Tax Credit four years in a row causing the average
homeowner to pay more for their city portion of their property taxes in Fiscal Years 2005, 2006, 2007, and 2008. This also
changed the City's benchmark of $510.45 (of no increase to the average homeowner) for FY 2005, FY 2006, FY 2007, and
FY 2008.
FISCAL YEAR 2008
January 1, 2006 Valuation
Less Rollback Factor
Fiscal Year 2008 Taxable Value
Fiscal Year 2008 City Tax Rate
Fiscal Year 2008 City Property Tax
Homestead Tax Credit
Homestead Tax Credit Adjustment - 73% funded by State
Net Fiscal Year 2008 City Property Tax
FISCAL YEAR 2009
January 1, 2007 Valuation
Equalization Order
January 1, 2007 Valuation after Equalization Order
Less Rollback Factor
Fiscal Year 2009 Taxable Value
Fiscal Year 2009 City Tax Rate
Fiscal Year 2009 City Property Tax
Homestead Tax Credit
Net Fiscal Year 2009 City Property Tax
Dollar Increase in Property Tax
Percent Increase in Property Tax
$116,368
0.455596
$53,017
$10.3169
$546.97
($50.04)
$13.52
$510.45
$116,368
12.03%
$130,367
0.440803
$57,466
$9.9690
$572.89
($48.35)
$524.54
$14.09
2.76%
Attachment V
IMPACT OF BUDGET ON CLASS OF PROPERTY
COMMERCIAL
$3,soo
$3,00
~ M
'~
$3,soo
$3,500 M
$3,400 ",~
$3,300
$3,200 ~
$3,100
$3,000
2005^ 2006 2007^ 2008 2009
s City portion of property tax paid by the average commercial tax payer
"Reflects State of Iowa mandated equalization order
FISCAL YEAR 2008
January 1, 2006 Valuation $357,536
Fiscal Year 2008 City Tax Rate $10.3169
Fiscal Year 2008 City Property Tax $3,689
FISCAL YEAR 2009
January 1, 2007 Valuation $357,536
Less Rollback Factor 0.997312
Fiscal Year 2009 Taxable Value $356,575
Fiscal Year 2009 City Tax Rate $9.9690
Fiscal Year 2009 City Property Tax $3,555
Dollar Decrease in Property Tax ($133.95)
Percent Decrease in Property Tax -3.63%
Attachment VI
IMPACT OF BUDGET ON CLASS OF PROPERTY
INDUSTRIAL
$s,5oo ~
`°
$6,300 ~n ~
~ rn
$6,100 ~ `~ ~,
$5,900 `~
$5, 700
$5,500
$5,300 °
.
$5,100 ~
$4,900
$4,700
$4, 500
2005 2006 2007 2008 2009
^ City portion of property tax paid by the average industrial tax payer
FISCAL YEAR 2008
January 1, 2006 Valuation
Fiscal Year 2008 City Tax Rate
Fiscal Year 2008 City Property Tax
FISCAL YEAR 2009
January 1, 2007 Valuation
Fiscal Year 2009 City Tax Rate
Fiscal Year 2009 City Property Tax
Dollar Decrease in Property Tax
Percent Decrease in Property Tax
$599,500
$10.3169
$8,185
$599,500
$9.9690
$5, 976
($208.54)
-3.37%
Attachment VII
CITY OF DUBUQUE COSTS OF MUNICIPAL SERVICES
INCREASE FOR AVERAGE H OME'S CITY UTILITY AND PROPERTY TAX EXPENSE FY 1989-2009
MONTHLY CHANGE IN
REFUSE STORM RESIDENTIAL ANNUAL COST
MONTHLY % INCR/ WATER PROPERTY OF MUNICIPAL
FISCAL YEAR WATER SEWER RATE (DECR) FEE TAX SERVICES
FY 1989 3.00% 0.00% $4.00 6.67% -11.40%
FY 1990 3.00% 3.00% $4.50 12.50% -0.89%
FY 1991 2.00% 2.00% $6.00 33.33% 3.77%
FY 1992 3.00% 3.00% $7.00 16.67% 3.58%
FY 1993 0.00% 0.00% $9.00 28.57% 5.19%
FY 1994 0.00% 0.00% $9.00 0.00% 0.30% $1.51
FY 1995 0.00% 0.00% $8.50 -5.56% 2.43% $6.41
FY 1996 3.00% 0.00% $7.50 -11.76% -0.87% ($12.69)
FY 1997 0.00% 0.00% $7.25 -3.33% -0.42% ($5.19)
FY 1998 0.00% 0.00% $7.00 -3.45% -0.71% ($6.6fi}
FY 1999 4.00% 0.00% $7.00 0.00% 0.00% $5.30
FY 2000 1.00% 0.00% $7.00 0.00% -0.17% $0.51
FY 2001 3.00% 0.00% $7.44 6.29% 0.00% $9.46
FY 2002 0.00% 4.00% $7.50 0.81% 0.00% $6.51
FY 2003 (July and A ugust) $8.20 Pre UBP System .
FY 2003 2.00% 1.00% $7.20 -4.00% -5.00% ($22.14)
FY 2004 4.68% 3.00% $7.60 5.56% 1.29 1.54% * $37.64
FY 2005 3.00% 4.00% $8.51 11.97% 1.29 0.40% * $24.76
FY 2006 4.00% 5.50% $8.70 2.23% 1.79 1.90% * $34.98
FY 2007 4.00% 9.00% $9.46 8.74% 2.25 -1.52% * $29.24
FY 2008 5.00% 5.00% $9.89 4.55% 3.25 2.72% * $48.81
PROJECTION
FY 2009 9.00% 9.00% $10.35 4.65% 4.00 2.76% $62.87
FY 2010 5.00% 10.00% $10.62 2.61% 5.00 7.73% $87.36
FY 2011 5.00% 11.00% $10.72 0.94% 5.50 9.95% $100.08
FY 2012 5.00% 13.00% $10.82 0.93% 6.35 8.26% $108.07
FY 2013 5.00% 14.00% $10.92 0.92.% 7.00 6.01 % $52 07
AVERAGE ANNUAL
PERCENT CHANGE 2.95% 3.86% 4.79% 1.42%
NOTES REGARDIN G PROJECTIONS:
1. The projections do not include any anticipated tax burden shifts as a result of state issued equalization orders or rollback factors.
2. The projections for the cost of municipal services are based o n average water usage of 800 cubic feet per month and
an assessed value on the home in FY 2009 of $130,367 (before rollback).
* State Increased p roperty taxes to the average homeowner by underfunding the Homestead property tax credit.
Attachment VIII
Comparison for Ten Largest Iowa Cities
Taxable Value per Capita
Rank City Taxes
Per
Capita Tax Rate 2000 Census
Population Taxable Value
With Gas ~
Electric
10 West Des Moines $895 $12.38 46,403 3,354,478,329
9 Iowa Cit $731 $17.72 62,220 2,565,360,329
8 Council Bluffs $633 $18.08 58,268 2,040,376,367
7 Cedar Ra ids $614 $15.07 120,758 4,919,665,363
6 Daven ort $567 $15.58 98,359 3,580,700,760
5 Waterloo $564 $18.37 68,747 2,112,530,991
4 Des Moines $508 $17.18 198,682 5,874,658,327
3 Sioux Cit $441 $18.71 85,013 2,003,308,335
2 Ames $423 $11.06 50,731 1,941,794,882
1 Dubuque $325 $9.97 57,686 1,878,770,648
AVERAGE w/o
Dubuque $597 $16.02 87,687 3,154,763,743
Dubuque is the LOWEST taxes per capita in the state for property tax rate. The highest ranked city (West
Des Moines) is 176% higher than Dubuque's taxes per capita, and the average is 84% higher than
Dubuque.
CITY OF DUBUQUE
HISTORICAL TAX RATE AND COST COMPARISONS BY CLASS OF PROPERTY
RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL -1987 - 2009
Attachment IX
Residential Commercial Industrial
Net Net Net
Property Property Property
FY Tax Rate % Tax % Tax % Tax
2009 9.9690 -3.37% 524.53 2.76% 3,554.71 -3.63% 5,976.44 -3.37%
2008 10.3169 3.37% 510.45 2.72% 3,688.64 4.26% 6,184.95 3.37%
2007 9.9803 2.90% 496.93 -1.52% 3,538.03 12.23% 5,983.21 2.90%
2006 9.6991 -3.70% 504.62 1.90% 3,152.52 -5.89% 5,814.61 15.46%
2005 10.0720 -1.96% 495.21 0.40% 3,349.90 2.18% 5,036.00 -1.96%
2004 10.2730 0.60% 493.26 1.54% 3,278.42 2.89% 5,136.52 0.60%
2003 10.2120 -5.10% 485.79 -5.00% 3,186.27 9.48% 5,106.00 -5.10%
2002 10.7608 -2.77% 511.37 0.00% 2,910.24 -2.77% 5,380.40 -2.77%
2001 11.0671 3.28% 511.38 0.00% 2,993.08 2.01% 5,533.55 3.28%
2000 10.7160 -3..23% 511.38 -0.17% 2,934.21 -0.60% 5,358.00 -3.23%
1999 11.0734 -2.87% 512.25 0.00% 2,952.03 7.80% 5,536.70 -2.87%
1998 11.4011 0.17% 512.25 -0.71% 2,738.43 2.97% 5,700.56 0.17%
1997 11.3815 -3.40% 515.91 -0.42% 2,659.36 9.01% 5,690.75 -3.40%
1996 11.7821 0.00% 518.10 -0.87% 2,439.60 0.00% 5,891.05 0.00%
1995 11.7821 -6.54% 522.65 2.43% 2,439.60 8.42% 5,891.05 -6.54%
1994 12.6059 0.86% 510.24 0.30% 2,250.15 0.86% 6,302.95 0.86%
1993 12.4989 -2.15% 508.73 5.19% 2,231.05 -2.15% 6,249.45 -2.15%
1992 12.7741 4.14% 483.63 3.58% 2,280.18 4.14% 6,387.05 4.14%
1991 12.2660 4.94% 466.92 3.77% 2,189.48 4.94% 6,133.00 4.94%
1990 11.6891 -0.95% 449.94 -0.89% 2,086.50 -0.95% 5,844.55 -0.95%
1989 11.8007 -15.41% 453.98 -11.40% 2,106.42 -15.43% 5,900.35 -15.41%
1988 13.9500 -4.33% 512.38 -1.87% 2,490.61 -3.15% 6,975.00 -4.33%
1987 14.5819 522.17 2,571.50 7,290.95
Avg Change Per Yr -1.61% 0.08% 1.66% -0.74%
RECAP (19 87 - 2009):
Residential Commerical Industrial
Net Net Net
Property Property Property
FY Tax Rate % Tax % Tax % Tax %
2009 9.9690 -31.63% 524.53 0.45% 3,554.71 38.23% 5,976.44 -18.03%
1987 14.5819 522.17 2,571.50 7,290.95
ARTICLE FOR CITY NEWS
The City of Dubuque's Fiscal Year (FY) 2009 begins July 1, 2008. With it, the City's
new rates and fees will go into effect.
I am pleased to report that the City portion of Dubuque's FY2009 City property tax rate
will be even lower than the rate I recommended to the City Council in March. The Iowa
Department of Management recently notified the City that the FY2009 property tax
assessed valuation increase was greater than anticipated increasing from the projected
amount of $1,779,297,458 to $1,800,795,871.
This increase in assessed valuation has allowed the City to reduce the FY2009 rate
from the $10.09 per thousand dollars of assessed value to $9.97. As a result, the
average residential property owner will now experience a 2.76 percent increase, or
$14.09, rather than 4 percent, or $20.43.
Compared to a tax rate of $14.58 in FY1987, the FY2009 tax rate has decreased 31.63
percent over the last 22 years. The average residential homeowner has seen an
increase of less than one percent or $2.36 in the amount of property tax paid since
FY1987. The average commercial taxpayer has seen an increase of 38.23 percent or
$983.21 and the industrial taxpayer has seen a decrease of 18.03 percent or $1,314.51
since FY1987.
The increased valuation will also benefit commercial and industrial property owners.
Commercial property owners were going to experience a 2.47 percent reduction, or $91,
will now have a 3.63 percent reduction, or $133.95. Industrial property owners would
have received a 2.2 perecent reduction, or $136.33, will now get a 3.37 percen#
reduction, or $208.54.
At $9.97 per thousand dollars in assessed valuation, Dubuque has the lowest property
tax rate among Iowa's 10 largest cities. The highest ranked city (Sioux City - $18.71) is
88 percent higher than Dubuque's rate, and the average ($16.02) is 61 percent higher
than Dubuque.
At $325, Dubuque also has the lowest property taxes per capita (taxes collected per
person age 18 and over) among Iowa's 10 largest cities. The highest-ranked city (West
Des Moines - $895) is 176 percent higher than Dubuque's taxes per capita, and the
average ($597) is 84 percent higher than Dubuque.