Expand Magazine - Volume 6 Issue 2

Council
Connection
By Alex Watters
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Improving Sioux City With One Hand Tied Behind Our Back
T
he City Council recently met with our local
delegation (senators and representatives)
to discuss our goals, priorities, and how the
legislature in Des Moines can help us. We
discussed various topics, some that are rumored to be
at risk of losing funding and others where improved
processes could greatly improve our efficiency and
operations. However, one of the topics presented by
Teresa Fitch, City Finance Director, caused me the greatest
concern. I wanted to share my perspective in hopes that
praise and blame get properly directed.
As an elected official, I open myself up to criticism and
feedback. At times, it can be difficult to hear; however,
I also believe that it can give us ideas for improving our
community. Unfortunately, House File 718 appears to do
nothing but harm our taxpayers, and limit our ability to
fund essential services. The Governor signed this bill on
May 4, 2023, and essentially set parameters on what local
governments can tax their citizens to meet budget needs.
In year’s past, if your community experienced an increase
in the total value of assessed properties, the amount of tax
dollars could increase by the same percentage. However,
with this bill, various levies were consolidated into a newly
defined, adjusted, City General Fund Levy (CGFL), which
has a growth limitation based on property tax growth. If a
city experiences between 3% and 6% growth in assessed
value, the State will now only allow a 2% increase in the
CGFL. If the assessed value grows by 6% or more, the State
will only allow a 3% increase in the CGFL.
While initially lower taxes might be exciting initially,
sometimes that can be to the detriment of a community.
The City of Sioux City has kept their taxes as low as
possible, utilizing fund balances in place of raising taxes,
and decreasing taxes when possible. These funds are used
for a various City services including: public safety, parks
and recreation, library services, the museum, subsidizing
the airport, the Convention Center, and Tyson Events
Center, in addition to day-to-day operations. As costs of
services continue to rise, this levy limitation may hinder the
necessary funds to maintain existing services and public
safety. The impact of this bill is $603,076 in lost property tax
revenue for the FY 2025 budget year (2023 Assessments).
If the City experiences 6% growth in assessed values, the
3% CGFL growth limit would amount to a loss of $11.4
million in property tax revenue in the next five years. If the
City only experiences a 4% growth in assessed values, the
2% CGFL growth limit would amount to a loss of $10.8 million
in property tax revenue in five years.
The $10.8 million to $11.4 million in lost revenue in the next
five years would go a long way in funding existing services and
expanding others. The City has used fund balances for years to
be fiscally responsible to the taxpayers, with not having those
excess fund balances. The City may have to look at cutting or
modifying existing services. However, the Governor and state
legislature seem to believe they would do better if that money
was directed to them.
I believe that if I’m spending foolishly and increasing taxes at a
rate that doesn’t make sense, the citizens of Sioux City will hold
me accountable at the ballot box. I trust our local governments
to manage their money. If the State doesn’t, perhaps the State
Auditor could assist, but please urge your elected officials to
stop bills like this that are stripping services and funds used to
help our communities.
Alex Watters, City Council of Sioux City
awatters@sioux-city.org