Fairfield Ledger

Mt. Pleasant News   Wash Journal
Neighbors Growing Together | Mar 24, 2018

Fairfield reduces levy 4 cents

Revenues will drop due to change in state law
By Andy Hallman, Ledger news editor | Feb 27, 2018

The Fairfield City Council approved its 2018-19 budget Monday, which includes a slight levy reduction.

The levy was lowered 4 cents from $15.93 per $1,000 of assessed valuation to $15.89. City Administrator Aaron Kooiker said the city was able to do that because its debt has gone down.

The city was able to lower its expenditures 1.6 percent. Revenue is expected to slide 4.8 percent. Kooiker said that’s because of a new state law that changes how properties are valued.

Under the old law, if a building contained both commercial and residential uses, like many of the buildings downtown that contain office space on the first floor and apartments above, the building owner had to pay commercial property taxes for the whole thing. Under the new law in effect this year, those building owners pay commercial property taxes only on the commercial portion, and residential taxes on the residential portion.

This is significant because commercial property is taxed at a higher rate. The state requires commercial property owners to pay tax on 90 percent of the value of their property, but for the 2018-19 fiscal year, requires residential property owners to pay on only 55.6 percent of the value of their property. Instead of paying taxes on 90 percent of the whole building like before, owners of mixed-use buildings are paying on 90 of just the commercial portion, and on 55.6 percent of the residential portion.

That’s a nice boost to commercial property holders. On the flip side, it means less revenue for the city. Kooiker said the city is expecting to lose $80,000 in the general fund as a result of the change.

Other noteworthy changes in the 2018-19 budget are:

• 1.5 percent pay increase for staff;

• 4.37 percent increase in the cost of health insurance;

• 2.52 percent decrease in the capital improvement reserve fund;

• 1.68 percent increase in the road use tax fund;

• Money for reconstructing 800 feet of Adams Avenue from Maple to D streets;

• Reconstructing alleys around city hall;

• Paving the city’s portion of 227th street, with the addition of a turn lane on Highway 1.



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