Legislative Correspondence_Homestead Tax Credit~} City Manager's Office
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Masterpiece on the Mississippi zoo?
January 30, 2009
Representative Name
Iowa State Representative
Street Address
City, IA Zip
Dear Representative:
In an article ran on January 30, 2009 in the Des Moines Register titled "Budget would boost
property taxes," it is reported that Governor Chet Culver has recommended to cut nearly $50
million from the state's reimbursements to local governments for the Homestead Property
Tax Credit beginning in Fiscal Year 2010. Governor Chet Culver's proposal would only fund
approximately 36.3 percent of the State Homestead Property Tax Credit. This is a dramatic
reduction from the Fiscal Year 2009 funding level of 72 percent.
The Homestead Property Tax Credit was established by the state legislature to reduce the
amount of property tax collected. The intent of the credit was to be a form of tax relief and
provide an incentive for home ownership. The State Homestead Property Tax Credit works
by discounting the tax collected on the first X4,850 of a property's taxable value. This
provides tax relief for homeowners.
Beginning in Fiscal Year 2004, the State of Iowa did not fully fund the State Homestead
Property Tax Credit resulting in homeowners paying the unfunded portion.
A history of the funding of the State Homestead Property Tax Credit is as follows:
Hrnestea r®erty T'ax Credit Hist®ry
2002-2003 State of Iowa Funded 100% of the Homestead
Property Tax Credit
2003-2004 State of Iowa Funded 85% of the Homestead
Property Tax Credit
2004-2005 ~ State of Iowa Funded 81 % of the Homestead
Property Tax Credit
2005=2006 State of Iowa Funded 78% of the Homestead
Property Tax Credit
H®rnestead r®pr~y T°ax Credit I®list®ry (c®ntinued)
2006-2007 State of Iowa Funded 77% of the Homestead
Property Tax Credit
2007-2008 ~ State of Iowa Funded 73% of the Homestead
Property Tax Credit
2008-2009 ~J State of Iowa Funded 72% of the Homestead
Property Tax Credit
If the State Homestead Property Tax Credit is reduced to 36.3% as opposed to 100%
funding, the average homeowner in the City of Dubuque would pay an additional $44.00 in
property taxes to the City of Dubuque. This would be an 8.39% property tax increase to the
City share of property taxes for the average homeowner. The alternative to a property tax
increase to the City would be a reduction of $1.6 million to the City's budget, which would
devastate the service levels provided to Dubuque citizens.
The City of Dubuque is firmly against the reduction of the funding of the State Homestead
Property Tax Credit. The State should fund the Homestead Property Tax Credit at 100% of
the original amount established by the State legislator. A reduction of this credit would not
only adversely impact the residents of Dubuque, but the entire state of Iowa in these tough
economic times.
Sincerely,
Michael C. Van Milligan
City Manager
The Honorable Pat Murphy
Speaker of the House
Iowa State Representative
155 N. Grandview Avenue
Dubuque, IA 52001
The Honorable Tom Hancock
Iowa State Senator
310 E Main Street
Epworth, IA, 52045
The Honorable Pam Jochum
Iowa State Senator
2368 Jackson
Dubuque, IA 52001
The Honorable Thomas Schueller
Iowa State Representative
503 W. Platt Street
Maquoketa, IA 52060
The Honorable Roger Stewart
Iowa State Senator
3936 317 Avenue
Preston, IA 52069
The Honorable Charles Isenhart
Iowa State Representative
1611 Main
Dubuque, IA 52001
The Honorable Steven Lukan
Iowa State Representative
7365 Columbus Street
New Vienna IA 52065
The Honorable Ray Zirkelbach
Iowa State Representative
637 W. First Street
Monticello, IA 52310