Marshalltown property owners may see a 10-cent increase per $1,000 valuation in property taxes in the future.

The increase may happen after the city council voted 5-1 at Monday’s special budget meeting to use $500,000 from Local Option Sales Tax (LOST) funds targeted for property tax relief. The $500,000 would be applied to debt service relief for one year.

At-Large Councilor Leon Lamer made the motion.

It is a proposal only, and residents will have an opportunity to comment on the final budget at a March 11 public hearing before it is submitted to County Auditor Nan Benson for review.

If the budget is finalized with the increase included, Marshalltown property owners would see their property tax increased from $15.28/$1,0000 taxable valuation to $15.38/$1,000 taxable valuation. The city council had not increased property taxes the last three fiscal years.

Voting in support was Sue Cahill, Mike Gowdy, Al Hoop, Leon Lamer and Bill Martin.

Voting no was Bethany Wirin. Councilor Gabe Isom was absent.

Councilors said they were reluctant to increase taxes at all and are hoping the increase proposed for the fiscal year beginning July 1 this year will reduce the need to make a higher tax increase for the fiscal year beginning July 1, 2020.

The uncertainties arising from the millions of dollars in damage caused by the July 19 tornado to the uncertainty of Federal Emergency Management Agency reimbursement played a major role in the council’s proposal. The city has applied to FEMA for nearly $5 million in reimbursement.

Another factor contributing to the council’s decision is the city’s shrinking tax base. The tornado destroyed a significant number of commercial and residential properties which have been torn down, meaning the city will have less tax revenue in the future.

The uncertainty of the state legislature renewing what is called “backfill” funding also plays a role. Backfill was put into place a number of years ago by the legislature when it rolled back commercial property taxes.

Put simply, it replaces city or county government’s loss of commercial property taxes.

There have been indications in past legislative sessions backfill may be eliminated, phased-out or changed.

It is unclear so far this session what the legislature’s intent will be.

“We hope it’s not just an elimination altogether, even a phasing-out is not going to be something that’s beneficial to the city of Marshalltown,” City Administrator Jessica Kinser said last year, adding the city would lose about $250,000 in backfill money if funding were to stop. Marshall County Board of Supervisors Vice Chairman Dave Thompson also said last year the county could also be adversely impacted by an elimination or phase-out of the backfill.

Hoop acted as mayor pro-tem at Monday’s meeting since Mayor Joel Greer was absent. Wirin, who usually serves as mayor pro-tem, participated via telephone, and she asked Hoop to run the meeting since he would be present.

The next regular meeting of the council is 5:30 p.m., Feb. 11 in council chambers, 10 W. State St. Visit marshalltown-ia.gov for complete agenda packets and subscribe to agenda notices and department news.

——–

Contact Adam Sodders at

(641) 753-6611 or

asodders@timesrepublican.com