MUSCATINE, Iowa — Muscatine residents would see a 1.33 percent increase in their property tax bill for the 2013-14 fiscal year under the city’s proposed budget, which was unveiled Thursday during the Muscatine City Council’s budget overview session.
But at least two city council members said they’d work to reduce or eliminate the proposed increase.
“One thing I can promise you, I will do my (expletive) to eliminate the increase in property tax,” said Osama Shihadeh.
Shihadeh said he thinks Muscatine’s proposed property tax rate — $15.88 per $1,000 of taxable valuation, a 21-cent increase over the current year’s $15.67 — “is on the high side” of Iowa communities.
In fact, other area communities had fairly comparable rates for 2012, the last year statistics were available. Clinton’s was $15.33, Fairfield’s was $16.36, Davenport’s was $15.53 and Burlington’s was $15.02.
“We need to try to toe the line on our tax rate,” said Councilman Mark LeRette.
City Administrator Gregg Mandsager and Finance Director Nancy Lueck presented a brief overview of the approximately $17.9 million general fund budget during a 30-minute meeting at City Hall attended by all seven council members and Mayor DeWayne Hopkins.
The largest increase in the proposed budget is for police and fire pension contributions, which account for an increase over the current year’s spending of almost $236,000. The city’s insurance costs are up about $104,000 in the coming fiscal year.
Continued police and fire pension increases, which are determined by a state board Mandsager said is “dominated by employees,” is “our Number 1 budget challenge today and for the foreseeable future,” he said.
According to the city’s analysis, increasing property taxes 1.33 percent will raise about $167,000. If council members want to reduce or eliminate the proposed increase, they have several options, which were outlined during the presentation:
They can double the franchise fee — a fee on natural gas bills paid by renters, other governments and churches who don’t directly pay property taxes — from 1 to 2 percent. That would generate an estimated $100,000 and lop the proposed increase by 12 cents, resulting in a 9-cent increase.
They could decide the city can complete the 2013-14 year with an ending fund balance less than the 15-percent goal established by the city council. The percentage is calculated by dividing the ending fund balance by total expenditures.
Or they could delay or eliminate some proposed capital outlays, such as $95,000 to replace and enhance the video systems in police squad cars, $30,000 for backstop fencing improvements at Kent Stein Park, $23,000 to paint and repair tennis courts and/or $25,000 to repaint the Aquatic Center pool basin.
At $15.88, the city’s proposed property tax levy is 27 cents lower than it was five years ago. Mandsager said that through departmental efficiencies and structural changes, the number of city employees has been pared by 15 since the 2001-02 fiscal year.
There are budgeting unknowns moving forward, Mandsager cautioned, and the city council and staff would be wise to keep an eye on them. The state could begin rolling back commercial and industrial property values, which could decrease allotments to local governments. Legislators could limit fine rates or even eliminate automatic traffic enforcement cameras, which are expected to bring in $600,000 to Muscatine during 2013-14.
By the end of the presentation, Shihadeh said he was ready to roll up his sleeves and dive into the annual budget-setting process.
“I’m looking forward to working with the rest of the council and city staff to come up with a good budget,” he said.