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County tax levy continues to decrease

Supervisors discuss FY 22 budget, vote set for March 25

IOWA CITY– For the fifth consecutive year, the countywide tax levy for Johnson County will decrease. The levy, assessed to property owners, will be $6.30143 per $1,000 of taxable value according to the Fiscal Year (FY) 2022 budget, beginning on July 1, and is down from the current rate of $6.34581. The Johnson County Board of Supervisors conducted a public hearing on the proposed budget Tuesday, March 16, and is scheduled for a final discussion and vote Thursday, March 25, at 9 a.m.
Finance Administrator Dana Aschenbrenner presented a brief overview of the budget proposal to the supervisors.
“Johnson County is a growing community, and that’s a good problem to have. It provides economic and social vibrancy to our county and the cities within it but it also increases demand for public services,” Aschenbrenner said.
The FY22 budget proposes to spend $11.2 million on capital projects, equipment and technology; $8 million in financial support for non-profit partners, agencies and other governmental entities; $680,000 for funding affordable housing, $1,566,800 for the Historic Poor Farm (projects and operations); $5.8 million in road construction and maintenance; $1.1 million for the newly opened GuideLink Center; $1.1 million in Joint Emergency Communications Center (JECC) upgrades; $1 million in a multi-year, multi-building renovation project for the county’s central campus buildings; $850,000 for improvements at the historic Sutliff Bridge; and $1.25 million for conservation land acquisitions.
In addition, additional fulltime staff is to be added for the Johnson County Ambulance Service (JCAS), the county attorney’s office, the sheriff’s office, the Johnson County Medical Examiner and the conservation department. Aschenbrenner noted the county’s population increased by 16.5 percent over the last decade, the county’s number of fulltime employees only increased by 5.5 percent over the same period.
Roughly 50 percent of the county’s financial resources come from property taxes, he said, with residential properties paying the lion’s share, approximately 55 percent, with commercial property accounting for a little over 20 percent and agricultural land and buildings, steadily declining, representing just shy of 15 percent. Industrial and utility property only accounts for about five percent.
The Rural Levy, an additional levy on rural properties, Aschenbrenner noted, is $3.76734 per $1,000 of taxable property value, a decrease of 0.8 cents. The levy funds animal control ($161,818), eight local libraries ($913,638), and provides for the maximum allowable transfer of funds from the Rural Basic Fund ($5.5 million, or 80 percent of the levied taxes in the Rural Fund) and the General Fund ($1.55 million) to secondary roads; all to the benefit of the rural areas. He was quick to point out Johnson County is ranked 66th out of 99 counties for its total rural levy rate, according to the Iowa State Association of Counties (ISAC).
The countywide levy rate has dropped over 92 cents since FY11. Aschenbrenner produced a chart tracking levy rates since FY13 ($6.74909). The levy peaked in FY16 at $6.90337, decreased in FY17 to $6.77140, and increased slightly the following year before beginning a steady decline.
Aschenbrenner laid out roughly $21.9 million in expenditures which qualify for financing through loans or bonding, including $11.7 million for all county and JECC insurance; $2.5 million for secondary roads projects; $2.8 million for construction and renovation projects, $1.54 million for vehicles, equipment and technology; $1.25 million for conservation bond projects; $1.1 million for JECC communications equipment and $680,000 for affordable housing support.
Bonding is a strategy the county has used for approximately 15 years.
“Prior to that, we never borrowed money,” Aschenbrenner said, “But we now use our bonding, and our ability to tap into our TIF (Tax Increment Financing) districts to try to at least get back some of that (tax) value (taxes are deferred in TIF districts for a set number of years, and the county is able to bond against the future tax revenue, which will be generated by the TIF district) that we feel is important.”
The county, working within the law, Aschenbrenner said, attempts to identify those purposes and expenditures the county can bond for.
“These would be expenditures the board would approve, and would be within our budget, and would be taxed for… and they are taxed for when we pay our bonds back (through the debt service levy). But the debt service levy is the one levy that the TIF districts have to pay back to the county. So, we try to maximize that amount.”
By doing so, the county is able to reduce the tax burden on residential property owners. The TIF areas will, Aschenbrenner estimated, contribute about $2.1 million in taxes, or roughly 51 percent of the diverted TIF taxes, which will reduce the cost of a residential property owner’s tax bill (for these expenses) by $20.67 per $1,000 of taxable valuation.
When it comes to debt, Johnson County’s $9,920,000 (as of June 30, 2020) pales in comparison to area entities such as the City of Coralville ($341,546,269), the Iowa City Community School District ($263,910,000), the City of Iowa City ($84,610,876) and neighbor Linn County ($59,076,328). As a rule, he said, Johnson County pays back about two-thirds of what it borrows each year.
“We usually borrow our money about mid-year in December, and then by June we’ve paid back two-thirds of that amount,” Aschenbrenner said.
Property values have steadily increased in Johnson County. Valuation increased 3.76 percent for FY22 over last year to surpass the $10 billion mark after sitting above $7,250,000,000 in FY15.
“We average about five percent (growth in valuation) each year so this (3.76 percent) represents a modest growth,” he observed.
Aschenbrenner presented a pie chart showing the breakdown of the $6.30143 levy with $3.50000 going toward general basic expenses, $2.16378 for debt service, $0.48234 to mental health and disability services and $0.15532 for general supplemental expenses. Overall, $13.7 million goes to the sheriff’s office, $15.7 million to secondary roads, $22.1 million for debt service, $6.2 million for the ambulance service, $5.4 million to mental health and disability services. SEATS will receive $4.2 million, $4.4 million is allocated to the county attorney, $5.7 million to public health, $6.4 million to capital projects, $7.5 million to block grants, and $36 million for all other departments.
Chair Pat Heiden noted, the county’s compensation board recommended a 2.75 percent pay increase for elected officials as part of the FY22 budget.
No comments were received during the public hearing.
Detailed information on the FY22 budget can be found online at www.johnson-county.com.