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Council approves first reading of 2026 property tax levy; staff says 1% limit constrains revenue
Summary
Finance Director Jerica Pascoe presented projections and the required public hearing; state limits the levy increase to 1% (IPD 2.44% so 1% cap applies). Staff projected the city's 2026 property tax collections at $3,814,745.18 and recommended first reading of Ordinance 4974; council approved first reading.
At a Nov. 3 hearing required under state law, Finance Director Jerica Pascoe presented estimated 2026 revenue sources and sought first reading of Ordinance 4974 to establish the 2026 ad valorem property tax levy. Pascoe explained that state statute limits property-tax increases to the lower of 1% or the implicit price deflator; because the IPD was 2.44% the city's lawful levy increase is capped at 1% for 2026.
Pascoe summarized the general fund revenue picture: projected 2026 general fund revenue of about $23.7 million, total available funding near $33 million including fund balance, and that taxes account for approximately 64.1% of general fund revenue. She noted property taxes account for roughly 25% of the general fund. Pascoe presented the estimated city property tax collections as $3,814,745.18 and said a 1% increase would add about $37,248.12 to the levy, which would translate to roughly $5.08 per year (about 42 cents per month) on a home with a taxable value near $400,000.
Members of the public urged the council to consider not taking the 1% increase (arguing for voter input and cost sensitivity); council members emphasized inflationary pressures and limited revenue options, and several said a 1% increase is the minimum to help keep pace with rising personnel and service costs. After discussion, council moved and approved first reading of Ordinance 4974.
