Budgets, Tax Levy Rates, & Wages

We’re continuing our discussion regarding budgets this week. Of course, the main way for a local government to bring in income is through property taxes. Property Taxes have taken quite a few turns in reform the last 5+ years. It’s a topic that is a clear as mud, but if you recall, I did try to explain the process the best I could back on July 14th . And, if you didn’t get to read that one or don’t remember it, all my editorials are on the county website under the Auditor’s page (www.franklincountyia.gov).

Anyway…as we are now working on budgets, we take a hard look at the property taxes and the revenue they bring to the county. We utilize the 2024 assessed value minus the rollback %’s to come up with our taxable value. Additionally, the state has put a new structure in place as of this fiscal year. This structure limits the amount of valuation growth a County or City can claim the following fiscal year for property taxes. For example: Franklin County had growth of 4.77% between Rural Basic & General Basic. With this growth, the state has limited us to an increase of 2% in property taxes for those two funds.

So, what does 2% growth get us?! Well, it doesn’t get us a whole lot anymore, right?! It doesn’t matter whether you’re buying groceries or gravel, a dollar just doesn’t stretch as far as it used to. Annual inflation rate for 2024 at the end of November was 2.7%. So, that means we’re automatically behind by almost a full percent. Now, I’m not saying it can’t be done and that the Supervisors and Franklin County Department Heads are working diligently to make sure it does, however…things that are completely out of control are increasing at a rate much higher than 2%. The maintenance agreement for the software that we use for managing all of County business went up 7% last year. Unfortunately, this is something we have to have and there is only one other option for software in the state and the other one is more expensive. This is just one small example. And, I think we all know that once the price of something goes up, it rarely goes down. It may stay stagnant but rarely moves considerably downward.

I have to commend the Supervisors and the Department Heads. The Supervisors challenged County leadership to limit their operating budgets to no more than a 2.5% increase. Almost all of them not only kept them under a 2% growth, but they did it with very little growth at all. I’ll also admit that this concerns me because I wonder if we are getting behind in projects & other progress that we’ll have to play catch up later. This is the balancing act that the Supervisors have to work on.

Budgets are multi-faceted and not quickly or easily decided on. It is a lot of back and forth on what projects to fund, how much of wage increases to give, and more. The Supervisors take their job very seriously so if you see them, feel free to ask questions or simply thank them for what they are doing. 

And until next time….