Property tax rate increases for Johnston city, schools. See how much homeowners could pay

Johnston homeowners could pay more in taxes this year after the school district and the city both raised their tax rates.

The Johnston City Council on April 15 approved the city's budget for the 2025 fiscal year, which begins July 1. The budget includes a property tax rate of about $11.44 for every $1,000 of a home's value, which is an increase of about 58 cents from last year's rate of $10.86.

The Johnston Community School District approved its budget April 22 with a property tax rate of about $13.89 for every $1,000 of a home's value, which is an increase of about 88 cents from last year's rate of $13.01.

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The new school district rate is still nearly $4.50 lower than it was five years ago, while the city rate remains 21 cents lower from the same time period. The school tax rate reached $18.35 in 2019 and dropped sharply last year after the district paid off debt for the new high school over a decade early. The city rate in 2019 was $11.65.

Will my property tax bill go up in Johnston?

Property tax bills are calculated as a dollar amount for every $1,000 of a property's assessed value. Separate governing entities — in particular, the city, the school district and the county — set their own rates for their parts of the total tax bill.

Home values in Polk County have increased by an average of 22%. But the state also reduced the rollback rate — or the percentage of a home's value that is actually taxed — from about 57% to about 46%.

An individual homeowner's final tax bill amount will depend on the value of their home and how much it has increased over the past year, if at all.

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Alongside the city and school budgets, Polk County approved its budget April 23 that keeps the tax rate for urban taxpayers the same at $6.77.

In Johnston, the owner of a $300,000 home that has increased 20% in value to $360,000 could see the taxes they pay to the city, schools and county go from $5,022 to $5,354, an increase of $332 for the year.

There will be other tax rates on a property owner's bill for Des Moines Area Community College, Des Moines Area Regional Transit and other public agencies. Homeowners who live outside the Johnston city or school district boundaries will see different rate breakdowns, including Urbandale city residents who are in the Johnston school district.

Why is the tax rate increasing in Johnston?

A school district's tax levy is made up of several components. One piece is the cash reserve, which can help cover costs like the special education deficit, English as a second language programs and cash flow.

According to budget information presented at school board meetings, the district levied $0 in taxes for its cash reserve in 2023 as it ran up against state limits. State law restricts how much taxes school districts can levy for its cash reserve, relative to total expenses, which can limit the amount of unspent cash districts have on hand.

Officials expected the tax rate to increase once the district was able to levy taxes for the cash reserve again in 2024.

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Meanwhile, Johnston's certified enrollment county of resident students decreased by about 150 students, which reduces state funding. However, the district used a provision in Iowa law to make up the difference through property taxes, which added 12 cents to the rate.

Johnston's total number of students served was actually higher than last year due to open enrollment, according to state data.

The $13.89 rate was the lowest recommended by district staff and remains lower than most comparable districts, according to information presented to the school board. Board members said the district has been financially responsible while providing services and competing as an employer, while lowering the rate could mean outcomes like larger class sizes and lower teacher salaries.

What about the city?

Meanwhile, according to information presented to the Johnston City Council, funding challenges included higher costs and pressure from inflation, while new construction from 2023 may not yet be on the tax rolls.

Changes in state law meant to help taxpayers also have limited city revenue and financial flexibility.

"This was a difficult budget year as we experienced increased costs and inflation pressures, which our residents are also experiencing,” Johnston Mayor Paula Dierenfeld said in a news release. "The (fiscal year 2025) budget reflects our city’s strong commitment to investing in the future of our community while prioritizing public safety. The budget we approved provides the funding necessary to support the high-quality services our residents expect and meet the demands of our growing community. Overall, the budget balances the needs of our city and ensures fiscal responsibility as we move into the future."

The city budget includes funding for two new police officers, a new mechanic, a recreation coordinator to support the upcoming Ignit youth sports facility, northwest sewer extension, a new firetruck and a new ambulance.

Chris Higgins covers the eastern and northern suburbs for the Register. Reach him at chiggins@registermedia.com or 515-423-5146 and follow him on Twitter @chris_higgins_.

This article originally appeared on Des Moines Register: Property tax rate to increase for Johnston schools and city