Sioux City council hears FY26 operating budget; state rollback, lost backfill drive proposed levy increase

Sioux City officials presented an updated FY2026 operating budget Wednesday and told the council that changes at the state level — not local spending choices — are the principal drivers of a proposed increase to the property tax levy.

Staff said the operating budget initially presented at roughly $260 million was revised after additional department-level reviews and one‑on‑one meetings. The updated proposed operating budget shown to the council is $258,340,139 after reductions and revenue adjustments; the net additional cost of recommended improvement requests to the operating budget is about $75,872.

City staff noted two state actions as major headwinds. The city is losing a multi‑year “backfill” that previously offset local revenue — cumulatively about $1.4–$1.5 million for the current year — and changes in state law on rollback calculations will add roughly $19 of the $50 increase per $100,000 of assessed value the city is projecting. Staff said Senate file 07/18 and House file 02/1952 were cited in the budget presentation as the statutory changes affecting this year’s revenue.

"This process starts back in July…we sat down with every department and…