Council told homestead exemption and rollback phase-outs could cost Dubuque roughly $2.24 million annually

Jennifer Larson, the city's chief financial officer, presented the council with estimates of the local revenue effect from homestead and rollback changes in Senate File 2472. She said the homestead credit will be converted to a homestead exemption—generally 10% of taxable residential value with a $5,000 minimum and $20,000 maximum (adjusted for inflation starting FY29)—and that the state’s phased payments backing prior rollbacks will end. "So this is the estimated local impact of that homestead credit switching to an exemption," Larson said in her presentation.

Larson told the council Dubuque has just over 12,000 homestead properties and that the city could see a reduction in taxable assessed value in the neighborhood of $222–223 million; isolating that change she estimated a gross revenue loss of about $2,240,000 using the city's FY27 tax rate. She also noted the state replacement payments tied to commercial and industrial rollback will phase out (final payments after FY27), and that not all replacement backfill goes to the general fund—Larson estimated roughly $646,000 in current replacement payments that affect the city's general fund would cease when phased out.

Larson repeatedly cautioned these are gross estimates and that final local impacts depend on how the Iowa Department of Management defines prior-year actual property tax dollars and other calculation rules. Council members asked staff to refine projections after state guidance and to consider the effects on budget priorities during upcoming goal-setting and departmental budget meetings.