North Iowa Reporter

At their April 3 meeting, the Algona City Council set the date for a public hearing on their proposed annual budget for the upcoming fiscal year.

City administrator Jacob Tjaden introduced the item to the council, saying they were planning on April 17 as the final public hearing and approval for the budget. 

He also shared that the council was presented with two different options for the levy rate. The current levy rate from fiscal year 2023 is 16.07. With all the changes in budget processes and amounts made by the State this year, the City can either adopt a 15.48 tax rate with a $195,000 transfer from City funds for debt service along with other City reductions; or select a 15.64 levy with only $150,000 transferred for debt service. 

"Yeah, I mean, it's really the State's made a series of decisions over the last ten years with commercial reform, multi-residential reform that again, even if us just staying at no growth in terms of property tax revenue, residential has to go up," Tjaden said in the meeting. "You know and so if you actually need, you know increased revenues at all which we need to but trying to find that balance, you know it's going to hit residential and that's frustrating. But the State's made those decisions for us."

Tjaden went on to talk about revenue problems that contribute to this issue. 

"The really big things impacting the budget are the multi-residential rollback rate that's been declining on a scale from 100% of taxable value down to the residential taxable value," he said. "FY24 will be the first year and then will stay at that. So in that FY 23, multi-residential was paying taxes on 63.75% of the property value. In FY 24 that will drop down to the residential rate of that 54.13%. On the commercial side, back in 2015, the State changed the commercial industrial back from 100 down to 90%. We are getting backfilled payment on those, but that's on declining scales. That's about $20,000 a year in revenue that we're slowly phasing out from the State. But the big impact that has this year was changes to the business property tax credit program. So when the State changed that residential levy back in February, that actually brought down our taxable commercial industrial properties as well."

Without the transfers for debt service and cuts made to the budget, the City would likely see a tax levy rate somewhere in the range of 16.5. Councilmembers were cautious with deciding their final budget amounts because they anticipated increased changes from the State and wanted to find a balance of keeping things low for taxpayers but maintaining their levels of service. They decided to go with the 15.64 rate and will approve the final budget at their April 17 meeting.