City Mgr & Other Info re: needs
crlianft CYou . . .
. For maintaining the rights of municipalities to form
communications utilities.
. For maintaining Tax Increment Financing as a vital
tool for community revitalization.
. For keeping apartment dwellings classified as
commercially taxed properties.
. For keeping an open mind to our suggestions related
to Property Tax Reform initiatives.
. For providing support to keep the negotiations
moving along between the City of Dubuque, the
Diamond Jo Casino, and the Dubuque Racing
Association.
THE CITY OF C_~,
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If funded at 2001 levels, the City of Dubuque property tax burden
for the average homeowner would drop 8.4%.
City of Dubuque
Homestead Property Tax Credit Fact Sheet
State Funded the Homestead Property Tax Credit at 100% every year until 2004
Additional Cost to
Average Dubuque Homeowner
.:. 2002-2003 q Homestead was funded at 100% $ 0.00
.:. 2003-2004 q Homestead was funded at 850/0 $ 7.47
.:. 2004-2005 q Homestead was funded at 81 0/0 $ 9.28
.:. 2005-2006 q Homestead was funded at 780/0 $ 10.35
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City Manager's Office
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
(563) 589-4110 office
(563) 589-4149 fax
(563) 690-6678 TDD
ctymg:r@cityofdubuque.org
~Y4-~
May 23. 2005
Mr. John W, Mardis
Mayor
123 N Evans Road
Evansdale. IA 50707-1199
Dear Mayor Mardis.
I have been fortunate to serve on the Iowa League of Cities Legislative Policy
Committee for the past several years, I have thoroughly enjoyed the experience,
I would like to make a suggestion for committee consideration this year. As you are
aware, the Iowa General Assembly enacted legislation this year that provided 100%
state sales tax abatement to the new racetrack in Newton, capped at $12.5 million, The
downtowns in cities across the state, both large and small. are desperately in need of
redevelopment and in many cases are on a downward spiral that will only change with a
bold strategy of intervention. The action taken for the Newton track may have provided
the tools needed to save our downtowns.
I would ask that the Iowa League of Cities advocate for a state sales tax abatement for
downtown redevelopment.
The state sales tax abatement could be structured as the Newton project, with 100% for
ten years or some graduated rate over 10 years or less. The graduated option would be
similar to Iowa Code 427B.1. which allows for partial property tax exemption for
industrial real estate.
The state would not be losing any money because they would be providing a limited
incentive to projects that were rarely going to happen anyway, as the conditions of
many of our downtowns will attest.
The increase in property tax to schools and the additional income taxes from jobs in
these retail establishments would more than offset the state sales tax losses from
projects that may have occurred anyway. The added vitality in small towns across Iowa
would make Iowa a more attractive place to live, work and locate a business.
Service
People
Integrity
Responsibility
Innovation
Teamwork
-4-
Mr. John W. Mardis
May 23. 2005
Page 2
Thank you for considering my suggestion.
Sincerely,
/Jll~l
Michael C. Van Milligen
City Manager
MCVM:jh
cc: Tom Bredeweg, Executive Director, Iowa League of Cities
-5-
Iowa League of Cities 2006 Priority: Property Tax Reform
Support a property tax reform initiative that eliminates inequities caused by rollback;
improves accountability to taxpayers; allows cities to continue to provide locally
determined services effectively and efficiently; and enables and protects other city
revenues.
Background
Legislators will consider property tax reform legislation again in 2006. The proposed
2006 priority language outlines problems that true reform must address including
eliminating the rollback formula, improving the budget reporting process, establishing
reasonable limitations and protecting current tax base. Any proposals to erode existinQ
tax base, such as reclassifvinQ apartments or worseninQ the rollback formula, will be
opposed. Any property tax changes may reduce increment available for TIF debt
repayment, requiring improvements to other financing options. Alternative revenues will
be promoted in the interest of holding the line on property taxes.
History of Rollback
2004 51.3874%
2005 48.4558%
2006 47.9642%
2007 45.9960%
Impact of reclassifying apartments as residential
Should this reclassification occur, these buildings would be subject to the residential
rollback and result in a tremendous loss of tax revenue for Dubuque. Below is an
analysis of the impact that such a bill would have on Dubuque using 2004 figures:
Total assessed value $115,650,400
Tax revenue loss for Dubuque County taxing bodies $ 1,659,285
Tax revenue loss for Dubuque
$ 547,564
-6-
IOWA LEAGUE OF CITIES
2006 LEGISLATIVE PRIORITIES
Economic Development
Protect and enhance economic development tools enabling cities in Iowa to promote
economic improvement throughout the state.
Background
Cities drive economic development in Iowa. Tax increment financing (TIF) is the primary
local development tool and must be protected or enhanced. Local government financing
tools need to be diversified. Legislators will consider restrictions to eminent domain,
potentially inhibiting this important tool that already protects property owners while
enabling needed development. Successful quality of life programs need continued
funding, such as Vision Iowa, Iowa Great Places, and tax credits for historic
preservation.
Pensions
Support legislation that strengthens actuarial soundness and fairly allocates the
contribution rates among participating parties while opposing any expansion of benefits
under the Iowa Public Employee Retirement System (IPERS) or the Municipal Fire and
Police Retirement System of Iowa (MFPRSI).
Background
Legislators will consider pension issues in 2006. The League will advocate for a
reasonable distribution between employer and employee should the IPERS contribution
rate be increased, while recognizing that MFPRSI policy has a more significant impact
to many cities. Any new benefits or expansion of existing benefits will be opposed.
Increased state contributions to the MFPRSI system will be sought.
Property Tax Reform
Support a property tax reform initiative that eliminates inequities caused by rollback;
improves accountability to taxpayers; allows cities to continue to provide locally
determined services effectively and efficiently; and enables and protects other city
revenues.
Background
Legislators will consider property tax reform legislation again in 2006. The League will
again coordinate a comprehensive reform initiative with the Iowa State Association of
Counties, streamlined from our original joint proposal made in 2005. The proposed 2006
priority language outlines problems that true reform must address including eliminating
the rollback formula, improving the budget reporting process, establishing reasonable
limitations and protecting current tax base. Any proposals to erode existing tax base,
1
such as reclassifying apartments or worsening the rollback formula, will be opposed.
Any property tax changes may reduce increment available for TIF debt repayment,
requiring improvements to other financing options. Alternative revenues will be
promoted in the interest of holding the line on property taxes.
2