ALTOONA, Iowa — With local governments navigating the new property tax law, a program meant to help first-time homeowners in Altoona is on the chopping block.Mayor Dean O’Connor said the city now has to make tough decisions ahead of financial pressure from the new property tax law.The law caps city revenue growth at 2%, except for new construction. Legislators predicted the law would help save taxpayers over $4 billion through the next six years. However, O’Connor said Altoona grows at a consistent rate betwee...
ALTOONA, Iowa — With local governments navigating the new property tax law, a program meant to help first-time homeowners in Altoona is on the chopping block.
Mayor Dean O’Connor said the city now has to make tough decisions ahead of financial pressure from the new property tax law.
The law caps city revenue growth at 2%, except for new construction. Legislators predicted the law would help save taxpayers over $4 billion through the next six years. However, O’Connor said Altoona grows at a consistent rate between 6% and 8% annually, and the 2% cap will limit the city.
He said, “When you’re growing at 6% or 8%, and you’re only able to keep 2% of that money, any business, private business would tell you, at that model you’ll eventually go out of business. You just will. You can’t keep up with it. And so, basically, the state has put us in a model of going out of business. And so, that’s what we’re dealing with now. And as we see that coming, you can even wait until you’re falling off the cliff to make decisions, or you can try to make them early.”
One of those early decisions the city is making is to cut its residential tax abatement program. O’Connor says it helps incentivize new residential construction and residential improvements by temporarily reducing taxes for five years.
“You save a little bit of money [with the program]. It helps you the first few years when you’re in your new home, especially when you need to buy lawnmowers and all those things that you don’t think about when you need to buy a home. But, I love the program. I think it’s really good for Altoona,” said O’Connor.
He said he doesn’t want to cut the program as it brings more people to the city, but O’Connor said cutting the program would allow the city to maintain the money necessary to fund services.
“They [legislators] just don’t seem to care about cities and how we function. Either they don’t understand, or they don’t care, or both,” he said.
The city council will consider the proposal on Monday, and the public is allowed to provide feedback. However, O’Connor said the city has already made its decision to cut the program.