Des Moines City Council set to backtrack on how much it will lower property tax rate
KATHY A. BOLTEN Feb 10, 2020 | 7:43 pm
3 min read time654 wordsAll Latest News, Law & Government, Real Estate & Development
Nearly three months ago, Des Moines City Council members loudly touted that they would reduce the city portion of property owners’ tax bill by 40 cents.
The decrease, originally proposed by Mayor Frank Cownie, was to be the lowest property tax rate Des Moines has had in 24 years. Cownie made the proposal about three weeks before a Dec. 3 runoff election against former state Sen. Jack Hatch. Cownie narrowly won the runoff election.
At its meeting today, the City Council is now expected to approve setting a maximum operating rate that is just 10 cents lower than the current levy of $13.67 per $1,000 of assessed valuation.
In 2019, the assessed valuations of property in Polk County increased an average of 10.56%, according to the Polk County assessor’s annual report. The increase in values means if taxing entities like the city keep property tax levies at the same rate, more revenue would be collected because of the increase in valuations.
City Councilman Joe Gatto said he wants the council to reduce the levy by 40 cents as it said it would in November.
“When residents open up their [property] tax bill, they are going to have a substantial increase even with a 10-cent decrease in the levy,” Gatto said. “Right now, we can pay for the things we want to do with a rate that’s lower” than what is being proposed.
During a workshop this morning, council members heard plans to spend nearly $213.5 million on capital improvement projects, including nearly $60 million in street projects, in the fiscal year that begins July 1. City Councilman Josh Mandelbaum, during the workshop, said Des Moines would not be able to complete those proposed projects and others if there is a downturn in the economy or the Iowa Legislature makes changes that take revenue away from the city.
“We’ve got some things that are potential risks, so it’s appropriate to be cautious and catch up on our investments,” Mandelbaum said.
The city of Des Moines would collect nearly 7% more from property tax revenue than it currently collects with a 10-cent decrease in the levy, according to a city document.
Des Moines this year will collect $106.5 million in property tax revenue for the operational portion of its budget. If the council lowers the property tax rate to $13.57 per $1,000 of assessed valuation from the current $13.67 rate, it would collect an estimated $113.8 million, according to a city document.
“The city’s [operating] budget will be increasing more than what the median household income has gone up,” said Art Wittmack, interim president of the Taxpayers Association of Central Iowa.
Gatto, at the council workshop, said he’d rather vote to lower the city’s property tax levy more than the proposed 10-cent decrease.
“It’s more expensive to live here in the city of Des Moines and we’re just not as competitive as we need to be,” Gatto said. “If we lower the tax rate 40 cents, we’ll still collect a significant amount of money.
“We have a significant amount of growth. We should be rewarding our taxpayers by lowering that rate; continue doing the projects we have got to do and fix our neighborhoods. … I’m going to have a difficult time voting for just a 10-cent reduction.”
The council at its meeting today is expected to approve adopting a resolution to establish the maximum amount of property tax revenue it can collect in the fiscal year that begins July 1. The revenue projection is based on a property tax levy rate of $13.57 per $1,000 of assessed valuation.
The council will still have the option of setting a lower rate when it adopts the budget for the fiscal year that is July 1, 2020, through June 30, 2021, after a budget hearing expected to be held March 23.
The council meeting is at 4:30 p.m. today at the council chambers at City Hall, 400 Robert D. Ray Drive.
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