Clear Lake council approves maximum property tax dollars for FY 2024 budget

CLEAR LAKE — The Clear Lake City Council last night approved the maximum property tax dollars for the Fiscal Year 2024 budget that starts on July 1st.

City Finance Director Creighton Schmidt says due to the rise in property valuation, the maximum property tax dollars will increase by 13.66% in the Fiscal Year 2024 budget, but the tax levy will slightly decrease.  “Our actual property tax rate is going to be declining from a 9.7 to 9.65. That’s with the debt service levy thrown in there. On the gray sheet here where it sets out the maximum property tax levy, you’ll see the 1.5998 last year to the 9.15842 this year, and that is the tax rate without the debt service levy. Once you put that in there, that’s where it goes from the 9.7 to 9.65.”

During this year’s budget process, cities and counties have had to deal with an error in the formula that determines some property tax rates. The Iowa Department of Revenue yearly makes a statewide calculation that affects property tax rates and the error is connected to a 2021 law change dealing with multi-residential property failed to adjust the statewide formula used to determine how much cities, counties and schools can collect in property taxes, meaning less money for those governmental bodies than expected.

Schmidt says it’s about a $200,000 hit to Clear Lake’s incoming revenue.  “The change that they made had approximately $200,000 of impact to our revenue. It won’t significantly change what we’ve set forth in our budget, so all the expenditures and everything we’ve looked at should remain basically the same, and will just have an impact to our year-end cash balances.”

While the council approved the “max levy” last night, the city will continue to delay finalizing its budget for the next fiscal year until they get final word on incoming property tax revenues. The state legislature passed a law allowing cities and counties 30 more days to finalize their budgets, pushing that deadline to April 30th.