By Kate Klimesh,
As budget discussions continue toward finalizing both city and county budgets, it is important to understand exactly what is funded through property tax dollars. Property taxes are levied by Winneshiek County, the City of Decorah, Winneshiek Medical Center, school districts and Northeast Iowa Community College. In this article, funding for the City of Decorah is highlighted to show how the property taxes paid by residents in Decorah support their city operations and services, and how that differs from business operations such as water, sewer, fiber internet and more.
Revenues collected from the city are funded by property taxes from the following levies: the General Levy, the Special Revenue Levy, the Emergency Levy and the Debt Service Levy. Other revenues do include fees and fines collected by the city, as well as payments received for business-type operations. Numbers discussed in this article are for the 2023-24 fiscal year beginning July 1, as discussed during the Monday, April 3, public hearing held prior to the regularly scheduled Decorah City Council meeting. The approved budget authorizes city staff to spend the money allocated in the budget in the next fiscal year.
The funds from the General Levy, currently at the maximum tax levy of $8.10/thousand of taxable valuation, cover a wide range of services provided to its residents: a portion of the costs of general administration of the city (city staff wages), the cost of Public Safety services, like Police Department, Fire Department, Housing Inspections, Planning and Zoning activities and Information Technology services. In these departments, the General Levy covers expenses not met by fees and fines. Currently, the City of Decorah assesses $0.82801/thousand for liability, property and self-insurance costs in addition to the $8.10 general levy.
Public Works also comes from the General Levy, which covers expenses such as the Library, Parks and Recreation, and can include additional cultural use levies if voters so authorize by majority vote on a referendum. Currently, the City of Decorah does not utilize any other levies to fund these items. The total cost of the General Levy services totals $8.92801/thousand.
Special Revenue Levies cover city employee benefits across the board, including Police and Fire Department retirement accounts, FICA, IPERS, Health Insurance and other costs of benefits, budgeted at $1,725,603. This levy totals $4.20959/thousand for 2023-24. This levy also includes the Emergency Levy to cover any unmet expenses not otherwise funded for city operations, equal to $0.27/thousand – the current cap –for 2023-24 fiscal year. This is one of few times the city has elected to utilize the Emergency Levy.
The Debt Service Levy for the City of Decorah is set at $2.94677/thousand, and according to Decorah City Manager Travis Goedken, this can be one of the most volatile levies to plan for. For the FY 2023-24, the Decorah City Council has authorized a portion of the Local Option Sales and Service Tax (LOSST) revenues to help pay down $125,000 of debt on the Locust Road project, which was due for its first principal and interest payment in this past year, which is why the Debt Levy shows a $0.40/thousand increase over prior years to a total of $1,151,999.
The city had refinanced the debt when interest rates were low, in efforts to curb tax dollars going toward interest payments. Paying down the Locust Road debt with LOSST funds kept property taxes from being raised to cover that debt even further. LOSST tax revenues to the City of Decorah must be used for street maintenance and repair per city ordinance, which does include the salary of the office of the City Engineer whose focus is strictly on roads and streets.
Other past projects included in the Debt Service Levy include the airport driveway project from 2018, as well as the Gundersen Health System helicopter hangar project of 2018, the remainder of the 2014 Highway 9 road project and the Locust Road Project completed in 2022.
Complete story available in the Decorah Public Opinion Newspaper.
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