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Lower city valuation leads to higher taxes for Ottumwa

Ottumwan's are facing a spike in property taxes. (MGN Online)

Ottumwa has dodged the bullet of the sharp tax increase, for now.

The assessed valuation for the city fell by approximately $47 million this year, which translates into a large blow to the city’s general fund.

To compensate for that loss, city council was faced with potentially increasing taxes by $2.03, a move city council was hesitant to make.

Andy Morris said the city was able to avoid that large increase by implementing a 50 cent tax increase to the Trust and Agency levy, which covers fringe benefits.

But he warns it is not behavior the city wants to repeat.

“Council approved then, the 50 cent increases into the Trust and Agency Levy. What (Bob Jay) was saying that night, that’s not something we want to repeat though. In some ways, it’s almost like masking the deficit,” Morris said.

While the increase to the Trust and Agency fund is a temporary fix, the ultimate long term solution is to increase revenue for the general fund.

He says the problem is not only affecting Ottumwa, but similar sized cities across Iowa as well.

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