Newton’s proposed FY25 tax levy reduced by 4 cents, more to come by FY29

Following the directions beset by a new law — House File 718 — the Newton City Council held a separate public hearing on the proposed property tax levy last week. But interestingly enough it is that same law that was thought to be one of the biggest challenges the council would face when budgeting for FY25.

From this point in time, it is hard for the city to determine what kind of impact HF718 had. The law did impact the city through the tax exemptions for people in the military and for people ages 65 and older. But it is likely the law will continue to impact the city until it expires in 2029, particularly its levy.

As a result of the city’s budgeting process, the council has set the levy for the FY25 budget at $17.10 per $1,000 of taxable valuation, which is down from $17.14 in the current year. City officials say the levy will still have to decrease by $0.27 by FY29 as part of HF718. But other factors affected budgeting this year, too.

Newton City Administrator Matt Muckler told Newton News another huge hurdle was the residential rollback. In FY24, the rollback for residential properties was set at 54.65 percent, but in FY25 it is at 46.34 percent. For residents who want reduced taxes, this is good news. But it also means less revenue for the city.

“The residential rollback for the FY25 budget decreased more in a single year than it has in 30 years,” Muckler said. “So that means that residents are paying a lower percentage of their taxable value … Even if they saw an increase in their assessment, that is going to be offset, in a lot of cases, by the rollback.”

Newton Finance Officer Lisa Frasier said the public hearing was a culmination of the budgeting process that started in May 2023 for city staff and in October 2023 for council members. Frasier said it was a long process that required a lot of decisions to be made; some of them more difficult than others.

“We worked through a lot of things and came up with a levy of 4 cents less than the year before,” Frasier said. “That doesn’t seem like a lot but that is a great accomplishment considering some of the rules that were put in place that really restricted the city’s hands in some of the revenue producing things.”

To make up for revenue shortfalls, the city looked at its fee schedules. The city also reduced the amount of capital items being purchased out of the general fund. Muckler said unfortunately some of those items had to be pushed to the debt service; so the city is taking on more debt.

“Typically, the best practice would be to have a little capital built into your operating budget,” Muckler said. “Unfortunately, one of the places where we had to make reductions was in those capital items.”

The $17.10 levy is the lowest it has been since 2016. Muckler said since that time the levy has remained steady at $17.14. As part of HF718, the city council held a public hearing for residents to comment or offer objections to the proposed tax levy. However, only one person spoke out at the meeting.

Eugene Lammers, of Newton, said a number of people he knows are pretty upset about taxes, but his big concern is he heard “our country is dead.” He then complained about how much national debt the federal government is in, reasoning that now is the time to “think before you spend.”

Lammers added, “I think we’re going to be in trouble.”

Muckler was not surprised more people showed up to the public hearing, and the reason why, he guessed, was because the city lowered levy. From the feedback he received, some people may have also been confused about the mailings.