Pottawattamie County Property Taxes Graphic

After several years of little or no change to county property tax levy rates, the Pottawattamie County Board of Supervisors recently approved a budget for the 2015 fiscal year that included substantial levy increases – the largest one-year increase ever, or at least in modern times. 

The increases were designed to generate an additional $6.5 million in county tax revenues.

The new levy rates are expected to take the current fiscal year’s estimated tax revenues of $34.8 million to $41.3 million in the 2015 fiscal year – an increase of nearly 19 percent.

The big question taxpayers are asking is why. In fact, they’re asking several big “why” questions.

Why does the county need an additional $6.5 million in tax revenue?

Why are the levies going up either 12 or 16 percent, depending on where one lives?

Why didn’t the supervisors raise taxes a little at a time over a period of several years instead of dropping such a big increase on taxpayers all at once?

The short answer is simple: The county will need the extra money to operate next year.

The long answer as to why the county needs so much more money next year is a bit more complex.

But, to begin with, several members of the Board of Supervisors have privately admitted two things to The Daily Nonpareil:

First, they – the supervisors – allowed the county’s year-end cash reserve to “slip away,” as one supervisor put it, or at least to be reduced over a period of time to a level below what the county actually needs to operate.

Second, and somewhat sheepishly, a number of supervisors concede they should have probably raised the tax levies sooner; but then, raising taxes is never a politically popular thing to do.

Now, there appear to be no other options.

According to County Auditor Marilyn Jo Drake, the county needs to end each fiscal year on June 30 with enough money in the bank to operate from July 1, the first day of the new fiscal year, until the first of September, when new tax revenues begin coming into the county coffers.

If the cash reserve is less than what’s needed to operate those two months, the county could be forced to borrow outside money; or, as it has done in the past, the county will find itself needing to move money from one or more special funding accounts to the general fund in order to pay operating expenses the first two months of the fiscal year.

The transferred monies are always reimbursed to the appropriate special funding accounts as soon as the county begins receiving new tax dollars in September, Drake said.

In order to avoid the need for such maneuvering going forward, Drake says $3 million of the additional $6.5 million in tax revenue will be used to increase the cash reserve in the general fund at the end of the 2015 fiscal year.

Another $2.7 million will be used to pay for increased expenses in fiscal 2015. A general breakdown of the $2.7 million is as follows:

• Providing increased security in the courthouse will cost the county $500,000 in 2015. A half-million dollars will be used to buy and install the necessary equipment, and to pay for additional staffing – sheriff’s deputies – to man the security entrances. The initial expense will go away once the equipment is purchased and installed, but the new salary and benefit expenses will be ongoing.

• Another $400,000 will be used to cover the cost of the 2014 fall general election, an expense that occurs every two years.

• The county’s contribution to the Emergency Management Agency will increase by approximately $92,000; and, with some areas of spending declining in 2015 while others are budgeted to increase, a little more than $200,000 will be used to fund the net increase in non-personnel operating expenses.

• The final budgeted expenditure increase is $1.5 million to cover wage and benefit increases.

The remaining $800,000 of the $6.5 million will be used to offset lost revenue due to the 5 percent rollback in taxable valuations for commercial properties as mandated by the state, which occurs in fiscal 2015.

Unlike residential properties, for the past several years, commercial property owners have paid county tax based on 100 percent of their properties’ assessed valuation. Residential properties have paid tax on less than 100% of the assessed value due to state-directed rollbacks. In fiscal 2015, as directed by the state, commercial property owners will pay tax based on 95 percent of the assessed value, not 100 percent.

Although the state has pledged to reimburse counties for revenues lost due to the 5 percent commercial rollback – an estimated $800,000 for Pottawattamie County – the state has yet to tell the county how or when the reimbursement will be paid. The state hasn’t even acknowledged the $800,000 estimate to be correct.

Thus, Drake said, the county could not budget to receive the reimbursement funds in 2015. If the state pays the reimbursement in 2015, the county’s year-end cash reserve should further increase by an amount equal to the state payment, Drake said.

The county’s revenue plight continues to be further challenged due to ongoing revenue losses stemming from the 2011 flood.

Prior to 2011, the federal government housed up to 75 federal prisoners at the Pottawattamie County Jail, and the county received approximately $750,000 annually from the federal government as payment for services provided. When the 2011 flood waters continued to rise, federal officials decided to move their inmates to different facilities. The removal of the federal prisoners reduced county revenue by the $750,000 in annual federal payments.

Although the flood waters have long since receded, nearly three years after the federal prisoners were removed from the county jail, none have been returned.

One reason for the absence of federal prisoners is related to a change in philosophy at the federal level regarding incarceration – the feds are simply locking up fewer people, and for shorter periods of time.

Another reason is a lack of space in the county jail.

According to Jail Administrator Stu DeLaCastro, the county no longer has room to house federal prisoners. He told The Nonpareil that the county jail is now filled to capacity with local inmates.

But, since the higher population of local prisoners requires staffing levels and other expenses at the jail to be the same or higher as when federal prisoners filled the cells, the county finds itself unable to cut jail expenses to offset the lost federal funding.

The county also continues to struggles with another flood-related cash issue.

According to Drake, the county is still waiting for approximately $350,000 in reimbursement from the Federal Emergency Management Agency related to a variety of costs incurred during the 2011 flood. No one knows when the county will receive those dollars.

According to Drake’s assistant, Becky Belt – the county auditor’s budget guru – in preparation of the budget, the heads of all the various county departments met numerous times with the board of supervisors to develop what Belt described as the best budget possible.

When the final expense numbers were determined, the revenue number had to be increased by upping the tax levy rates enough to supply the monies needed to meet the budgeted expense. The result was the need for a $6.5 million increase in property tax revenue.

In order to generate the additional property tax dollars, property owners in Council Bluffs, Carter Lake and the county’s other incorporated cities will see their county tax levy go from $7.67 per $1,000 of taxable valuation to $8.93, approximately a 16 percent increase. Other county residents – those living in unincorporated areas – will see their property tax levy increase from $10.87 per $1,000 of taxable valuation to $12.25, a 12.7 percent increase.

Where tax levy rates go after 2015 is anyone’s guess. Decisions about future levy rates will be based upon expense costs, state rollback demands and how the county’s overall valuation changes – whether it increases or decreases.

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(15) comments

Tee Hunter

I used to live in CB... dont miss it. Bought a house in 2006 and in April of 2007 they were increasing my property taxes. I started off with a payment of 860.00 and by 2011 my payment was 1297 due to all the tax increases. Another thing............. where does all the tax revenue from all the casino's in iowa going ??????

Iowa: Revenue: $1.47 billion
18 riverboat, standalone and racetrack casinos with slots and table games.[thumbdown]

Felix

Let's see, there is incompetence, ineptitude, greasy palms, cowardice towards doing ones job, etc.

Lynn Ford

There is no question this increase is outlandish. The Board of Supervisors have been asleep at the wheel and spending money like they had it. Now they don't have enough money to operate from July to September when the tax money starts arriving. I was at the County Budget hearing to object and, you know what, I'm pretty sure I didn't see any of you posters there that is unless you are a public official. This didn't just happen but occurred over a number of years to get to this point. Wake up folks and get involved instead of just bitching about it.

Rick Stevens

cb52: I know that taxes are per $1,000 of what the government declares is the value. My point is that I'm tired of all of you fat cat property owners thinking that you shouldn't pay your fair share.

It's about time that we have leaders that understand that expansion of government should always be first. There is not a single person working for the county that isn't absolutely essential to our lives. If they don't receive substantial salary and benefit increases, our entire society will collapse.

$8.93 of $1,000 is virtually nothing. It should be at least $25/1000. $75/1000 would be better. It would allow us to have much better relationships with the government unions. It would stop crime, poverty, and unemployment almost immediately. That's how it has worked elsewhere where the government increased substantial revenue.

Again, kudos for the excellent leadership from our county supervisors.

Tim Wichman

Tmasdf and LC-dad, The $8.93 noted in the article is what you pay per $1000 of valuation. Your taxes went up 16% not $8.93. You are more that welcome to pay my tax burden this year and next if you wish. The increase this year shows a complete lack of leadership by the Supervisor's.

jthorn

NONPAREILONLINEFAN: "Way to start out with a bang Walsh (note HEAVY sarcasm)."
*******
Fan, you do understand that Pottawattamie County tax rates are not set by the Mayor of Council Bluffs, don't you? (Note WEARY scorn.)

Tim Blum

" Sometimes comments shouldn't be allowed."

If you've followed blogs in the DNP most times you can pick out the sarcasm in comments. This appears to me to be one of those times. I have found TIMASDF's comments on issues to be on target. We have also disagreed from time to time. I for one would never support censorship.

jeff minor

Below is a comment from TIMASDF! This guy is totally off his rocker. Sometimes comments shouldn't be allowed.

"Government needs to be bigger and have more power. It must continue to expand. If ever there was a problem in Pottawattamie County (and the rest of the country), it's that taxes are too low and that government is too small. It's time for all of the home owners and property owners to pay more. 16% more. To paraphrase Abraham Lincoln: This nation shall have a new birth of bigger government, and that government of the government, by the government, for the government, shall not perish from this earth."

Rick Stevens

I think we should all be supportive of these services that the government is offering. $8.93 is a pittance. We should all HAPPILY give the government what they want. After all, if the government wasn't steadily increasing in size, businesses would fail and we would all be unemployed. This revenue increase will make us safer, too. Who could possibly complain about that???

Kudos to these excellent Supervisors. I believe they are doing a great job. They made the tough decision when it needed to be made. If they decide to raise some additional revenue next year, we should all happily provide it.

Ultimately, we need to support each other. It's about time that the wealthy/greedy property owners in the county pay their fair share, instead of always stealing from the little guy and throwing the poor out on the street.

Allen Cohrs

Lets be clear. There is no excuse for a double digit tax increase. The Board of Supervisors has put all all farther down the road t serfdom. TIME TO VOTE THE BUMS OUT!

jeffwised

Another big ripoff from the county, my tax rate didn't go up but the liars increased my property value two years ago raising my tax 600 bucks. My house is worth about 15% less than before the last ripoff. Is the some problem at the courthouse? I haven't heard of any issues, perhaps they just want to keep up with Omaha.

cbomaha

Rocket, seems like you have it all figured out. I'll just go ahead and assume then that you filed papers to run for one of the open board seats. Hope you win. Oh wait, you were just complaining? Your post, more so than this budget, exemplifies what's wrong with this country. Too many complainers and not enough do'ers.

jeff minor

Let me guess, your one of the board members! I too am not happy, I wouldn't run because I am not a pathetic politician.[beam]

Jody McGruder

Way to start out with a bang Walsh (note HEAVY sarcasm). This is beyond crazy.[sad][angry]

RocketUSA1

Since 2008 my county tax bill has increased 11.71% and since 2005 a total of 18.11% now they need another 12% so in the last 6 years we are in need of almost a 25% increase in taxes to run the county and since 2005 we need 30% more in tax revenue? Plus when they get the $800K from the state will they return it to the taxpayers or spend it? What about the levy for the new equipment for the Courthouse, why make it part of a permanent increase? There is nothing more permanent than a temporary government program.

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