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Iowa City staff pitch LOST-funded levy cut, $3.5M for housing and doubled street rehab in FY2027 proposal
Summary
City staff proposed using the new 1% local option sales tax (LOST) to reduce the property-levy 20¢, direct about $3.5 million toward affordable-housing initiatives including the Summit Street project, double pavement rehabilitation funding and create community partnership supports; staff urged council to refine metrics before the April adoption deadline.
City staff presented a recommended FY2027 operating budget that leans heavily on a new 1% local option sales tax (LOST) to provide property-tax relief, boost housing investments and shore up infrastructure.
Jeff Ruin, the city manager, told the council the city anticipates about $14,000,000 in LOST revenue beginning 07/01/2026 and that the initial plan would allocate roughly half of that for property-tax relief and the rest across affordable housing, community partnerships and facilities. "Fifty percent of that is for property tax relief," Assistant City Manager Kirk Laman said when describing the ballot-directed spending categories.
Staff recommended a hybrid property-tax approach: a 20¢ levy rate reduction…
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