The post How the City of Ithaca’s proposed 2025 budget will affect property taxes appeared first on The Ithaca Voice.
ITHACA, N.Y. — The City of Ithaca’s proposed 2025 budget tops $107.5 million, an increase of about 6% from last year.
That figure could change later this week when members of Common Council propose, debate, and vote on amendments to the budget proposal. But City Manager Deborah Mohlenhoff, who prepared the 2025 budget proposal, has cautioned council that there is little wiggle room for substantial spending cuts.
In the lead up to the budget proposal, Common Council directed Mohlenhoff to craft a conservative budget that would avoid layoffs of city staff, but avoid unnecessary increases in city property taxes.
How much could property taxes change for property owners in the city? City residents can use this calculator to see what the approximate change in their property taxes will be under the city’s proposed budget.
The calculator also shows approximately what residents can expect to pay in school district and county taxes as well.
In the budget proposal, Mohlehoff stated the city could not avoid keeping property taxes the same for the median home owner without creating a budget shortfall of about $4.5 million. The median home value in the city is $350,000, to city budget materials.
The tax rate in the proposed 2025 budget is lower than the 2024 budget, dropping from a tax of $11.98 per each $1,000 of a property’s assessed value to $11.87 per $1,000 of a property’s assessed value.
But the total funds that the city will raise through property taxes will increase. The tax levy, or the amount of municipal funds raised through property taxes, constitutes the single largest revenue stream for the city. The levy usually accounts for about a third of the city’s total spending in a year.
The tax levy increased by over 8% to $33.2 million in the proposed 2025 budget. Common Council authorized the
The growth in the tax levy mirrors the growth in the tax base, also known as the taxable assessed property value. The tax base grew by about 9% in value from 2023 to nearly $2.8 billion. About 57% of property in the city is tax exempt, most of which is owned by Cornell University.
City officials said labor costs are the key factors driving up the projected spending for next year. A tense round of labor contract negotiations in 2023 resulted in raises for the majority of city workers. Outside of negotiations, the cost of health insurance and retirement benefits are rising in general, Mohlenhoff said.
Health insurance costs increased by 14%, and retirement costs raised 8%. Out of the $107.5 million proposed 2025 budget, about $27.8 million alone would be set aside to pay for employee benefits.
The city’s department of public works will see the most money allocated to the services it provides, such as water and sewer, road maintenance, and park maintenance.
Ithaca’s Common Council has been reviewing departmental budgets for about two weeks now. It is scheduled to finish departmental reviews on Wednesday.
Council members will go on to discuss and vote on amendments to the budget starting Thursday. Those amendments have not yet been published. The decisions that come during that meeting will finalize what, if any, changes to city services and property tax rate will look like.
The council could take a final vote on ethe budget as soon as Nov. 6, according to the current schedule.