Floyd County ‘max tax’ for next year would cut property tax collection $600,000

By Bob Steenson, bsteenson@charlescitypress.com

Floyd County property owners will pay $600,000 less in property taxes next fiscal year if the county “max tax” is approved as currently proposed.

The Floyd County Board of Supervisors approved setting the hearing on the maximum property tax collection for Monday, March 27, at 9:15 a.m. in the EOC room in the new Law Enforcement Center attached to the courthouse.

The members of the board – who all took office at the beginning of this year – have pledged to hold the line on tax increases for county property owners, and have been working on the county budget for the new fiscal year which begins July 1 since the day they took office, often holding marathon sessions that lasted through the morning and well into the afternoon.

The general services tax is a tax paid by everyone in the county who owns property, regardless if that property is in an incorporated city or in a rural area.

The rural services tax is an additional tax that is paid by people who own property in the rural parts of the county, to pay for services such as law enforcement, road clearing, county libraries and other services that city residents pay for through their city property taxes.

Some rural taxpayers could see increases on the rural portion of their taxes, though, if their taxable valuation increased more than the decrease in the tax rate.

In other words even though the rural services levy is proposed to drop by a tiny amount, some people may be paying that rate on property that has increased in taxable value.

The “max tax” levy was initiated by the Iowa Legislature several years ago, requiring boards that collect property taxes to hold an additional property tax hearing each year before the next fiscal year’s budget is certified, setting a limit on the amount of property taxes that can be collected in the next fiscal year for the largest parts of the budget.

The reduction in property taxes proposed for Floyd County represents an almost 10.4% reduction in general services taxes and a much tinier 0.07% – seven thousandths of a percent – reduction in rural services taxes that would be allowed to be collected.

Once the maximum tax is set after the public hearing, the county cannot increase the amount of taxes it collects in those two main funds, although it can still decide to collect less.

One of the reasons the geneal services tax is projected to drop so much next fiscal year is because it was higher than usual in the current year to make up for a clerical error on the max tax resolution two years ago that used the wrong set of numbers, resulting in the county not being able to collect any more in the that fiscal year than it had the previous fiscal year.

That resulted in the county dipping into its reserves that year much more deeply than it ordinarily would, and the current fiscal year’s tax rate is higher than usual to replenish those reserves.