Estimates from the Iowa League of Cities indicate that the City of Knoxville stands to receive $1.7 million less in property tax revenue over 10 years after the Legislature’s property tax reform is implemented and assuming “backfill” from the State. City Manager Harold Stewart went on to say that this does not include other changes, strictly reforms for commercial and industrial property tax payers.
“It’s not as bad as originally proposed,” Stewart said. In anticipation of less revenue to continue to provide services to the community, the Knoxville City Council passed 5 percent franchise fees on gas and electric bills. Stewart believes that the loss of revenue through the reform will be voided, due to the franchise fee revenue. In future budgets, more of the franchise fee funds will be used for police, fire, public works and other departments.
Property tax reform was proposed because Iowa has some of the highest rates in the nation. Reducing the burden is expected to encourage economic development.
Stewart said the State will have to wait to see if this strategy works and Iowa becomes more desirable to developers. He added that the City of Knoxville has been progressive in trying to spend less money than it takes in and finding ways to increase revenue. As costs increase, budgeting will become more difficult in the future, but he remains committed to finding ways to keep the community moving forward.