Rathbun officials report new construction value drop impacts property tax calculations

During the Rathdrum City Council meeting on August 13, 2025, significant discussions centered around the city’s financial status and the implications of new construction tax revenues. The meeting highlighted the importance of maintaining a healthy financial reserve while addressing the challenges posed by recent changes in property tax assessments.

City officials confirmed that the emergency fund remains intact, with approximately $1 million set aside for contingencies. The general fund balance is currently around $10.2 million, although it is expected to decrease to about $200,000 after departmental reimbursements. This financial strategy aims to ensure the city can manage unexpected expenses while continuing to generate interest income.

A critical topic of discussion was the recent adjustment in new construction market values reported by the county. Initially, the city anticipated a market value of $139 million for new construction, which would have allowed for an increase in tax revenues. However, a revised figure of $110 million was presented shortly before the meeting, resulting from a change in how land use changes are classified under state law. This adjustment significantly impacts the city’s ability to raise funds through new construction taxes, as it falls below the 8% cap allowed by state law.

The implications of this change are substantial for residents. With the new estimated levy rate, homeowners with a taxable property value of $400,000 can expect a decrease in their property taxes by approximately $62. Despite this reduction, the city plans to implement a modest 1.9% increase in property taxes, which will help fund essential services, including the hiring of two police officers and support for the parks department.

In conclusion, the Rathdrum City Council's discussions reflect ongoing efforts to balance fiscal responsibility with community needs. As the city navigates these financial adjustments, residents can anticipate changes in their property tax bills while the council continues to prioritize public safety and community services. The council will need to monitor these developments closely as they prepare for future budget considerations.