The Forest City City Council will hold a proposed property tax levy public hearing at 7 p.m. Feb. 3, in the council chambers at City Hall.
The public hearing is required by a new law that went into effect last August and passed by the state Legislature last year. The law also requires local government to issue a form showing the proposed levy.
“This is the state House's way of trying to be transparent of where your property taxes are going,” said City Administrator Barbara Smith, “and what it’s doing is confusing everyone. What seems to be the challenge is to have people understand the property tax levy form.
"People need to understand that the proposed property tax levy that we are going to pass is not the tax levy that they will be paying property taxes on.”
Even though the form says "proposed property tax levy," it is not a property owner's final tax bill, as it won't include the city's debt service levy. The city's budget process also isn't complete so that means city officials must use their best estimates going into the public hearing.
Common practice for local governments is to use the largest rate allowable by law.
“I used the 2 percent [increase] because it is the allowable rate by the state, but that does not a guarantee that we will go up a full 2 percent,” Smith said. “Once passed, legally we cannot go higher on the amount."
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This fiscal year the city's levy is $1,656,076. The proposed 2 percent increase would take that to $1,689,128.
Smith said that it was too early to say how the final tax levy calculations would affect property taxes, due to the budget and the total tax levy not being complete at this point.
“Overall, I’m predicting that tax rates are going to go down about seven cents a thousand because of the other levies,” said Smith, pointing out that projection was no guarantee until the budget was done.
“I’m projecting our debt service is 4.734 cents per thousand [for the city's portion],” said Smith. “What I’m projecting it is not a guarantee until the budget is ready.”
The proposed tax levy budget will be finalized in March. Notices of public hearings for the budget must be published on the city's website, its Facebook Page, and the local newspaper.
“The form published in March will include: total property tax dollars, our revenues, all expenses, our actual tax levy, everything,” said Smith. “It will have utilities added in there. I do not foresee a rate increase in water, sewer, or garbage this year. Electric yes, because of the 10-year project we are working on, it will be a small 2% or 3% increase projected.
"This is a very confusing bill/law that the state house has passed,” said Smith. “If you have questions or concerns please call me, set up an appointment and I will try to explain it to the best of my ability.”
Smith can be reached at 641-585-3574 or via email at email@example.com.
Jesusa Christians is the Community Editor of the Forest City/Britt Summit-Tribune.