By Attorney Elizabeth Burnett
House File 718, signed by the Governor on May 4, 2023, (“HF 718”) changes the budgeting process and requires cities and counties to include additional steps in their budget approval process. This client alert provides a detailed list and explanation of the new steps imposed by HF 718. To view a checklist of the budgeting process, please click here. In order to meet the additional budget requirements, cities and counties should plan to start their fiscal year 2024-2025 budgeting early, including any pre-levy planning, to ensure compliance with the deadlines.
Budget and Levy Certification Date: The Certification Date has been moved to April 30 (See Budget Process below).
NEW Procedure during Budget Process: County Auditors are now required to send Budget Statements to all property owners or taxpayers in the city or county not later than March 20. Each city or county must now file a report by March 15 with the Department of Management that contains all the information necessary to include in the Budget Statements. The Budget Statements must include:
1. The sum of the current fiscal year’s actual property taxes certified for levy for all of the city or county’s levies and the combined property tax rate per $1,000 for such tax amount for the current fiscal year;
2. The combined effective property tax rate for the city or county calculated using the sum of the current fiscal year’s actual property tax certified for levy of all of the city or county’s levies above;
3. The combined amount of the property tax dollars to be certified for all of the city or county’s levies for the budget year and the proposed combined property tax rate per $1,000 for such levies;
4. If the proposed property tax dollars specified under (3) exceeds the current fiscal year’s actual property tax dollars certified for levy specified in (1), a detailed statement of the major reasons for the increase, including the specific purposes or programs for which the city or county is proposing an increase;
5. An example comparing the amount of property taxes on a residential property with an actual value of $100,000 in the current fiscal year and such amount on the residential property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts;
6. An example comparing the amount of property taxes on a commercial property with an actual value of $100,000 in the current fiscal year and such amount on the commercial property using the proposed property tax dollars for the budget year, including the percentage difference in such amounts;
7. The city or county’s percentage of total property taxes certified for levy in the owner’s or taxpayer’s taxing district in the current fiscal year among all taxing authorities;
8. The date, time, and location of the city and county’s public hearing on the information contained in the Budget Statements. This is an additional hearing requirement and is different than the hearing already required under Iowa Code section 24.9. This hearing must be separate from any other meeting of the city or county including any meeting or public hearing relating to the city or county’s budget and other business of the city or county not related to the proposed property tax amounts and the information in the Budget Statements. Information not related to the proposed property tax amounts and information in the Budget Statements may NOT be conducted at the meeting at which this public hearing is held. Notice of the public hearing must be published not less than ten but not more than twenty days prior to the hearing. For counties, notice must be published in a newspaper selected under chapter 349. For cities, notice must be in a newspaper published at least once weekly and having general circulation in the city. If the city has a population of 200 or less, publication can be satisfied by posting in three public places in the city. FOR BOTH CITIES AND COUNTIES, NOTICE MUST ALSO BE POSTED AND CLEARLY IDENTIFIED ON THE CITY OR COUNTY’S INTERNET SITE ALONG WITH COPIES OF THE BUDGET STATEMENT AND PRIOR YEARS’ NOTICES. THE NOTICE ALSO MUST BE POSTED ON ALL SOCIAL MEDIA ACCOUNTS OF THE CITY OR COUNTY. THE INTERNET AND SOCIAL MEDIA POSTS SHALL BE POSTED ON THE SAME DAY AS THE PUBLICATION OF THE NOTICE; and
9. Information on how to access the city or county’s Budget Statement and other budget documents for prior fiscal years on the city or county’s internet site.
Cities and counties with questions related to impacts on public financing should consult their bond counsel, disclosure counsel, and/or municipal advisor.
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