Oskaloosa Voters May Decide New 10-Year Street Tax in September
Oskaloosa City Hall
OSKALOOSA — Oskaloosa City Council members are considering a plan that would ask voters to approve a new property-tax levy for street work. The discussion is planned for tonight’s city council meeting beginning at 6 pm inside city hall.
If the council approves the election resolution, voters would decide the question in a special city election on Sept. 8, 2026.
The proposal would allow the city to collect up to 67.5 cents for every $1,000 of taxable property value for up to 10 years. The new tax would be added to the property taxes residents already pay. It would not replace another city tax.
The money would go into a special fund for street-related work. It could be used to build, rebuild, or repair streets. It could also be used for sidewalks, streetlights, traffic signals, and utilities associated with street projects.
City staff estimates the levy would raise about $315,787 in its first year. Under the city’s estimate, a home assessed at $148,000 would see a tax increase of about $44.62 per year. A home assessed at $300,000 would see an increase of about $90.32 per year.
Those figures are estimates, not guarantees. A property owner’s final cost would depend on the taxable value of the property. Taxable value can change because of property assessments and state tax rules.
If the levy raised about the same amount each year, it could bring in roughly $3.16 million over 10 years. That is a meaningful amount of money, but it would not cover all of the city’s expected street needs.
The city’s current five-year pavement plan lists more than $14.6 million in street, sidewalk and pavement work between fiscal years 2027 and 2031. The plan includes major projects on North 3rd Street, Penn Boulevard, High Avenue West, North Market Street and other streets.
The city’s schedule lists North 2nd Street, South 1st Street, and South C Street as possible projects for capital-improvements-levy funding. Together, those projects are estimated at about $870,000.
But voters should understand that those streets are not guaranteed by the ballot question.
The ballot language gives the city broad authority to use the money for eligible street projects. The City Council would still decide in future budget meetings which projects receive the money, how much they receive, and when they move forward.
That means a yes vote would approve a new source of tax money for streets. It would not approve a fixed list of projects.
The levy also would not guarantee that the city stops borrowing money for major street projects. Several projects in the city’s pavement plan are marked as possible bond projects. The levy could help the city complete some work sooner or reduce some borrowing, but it would not eliminate the need for bonds on large projects.
Another question residents should ask is whether recent state property-tax changes are making it harder for cities to keep up with costs.
A new Iowa law will affect city budgets beginning July 1, 2027. That is the same year Oskaloosa plans to begin the proposed levy.
The law limits how quickly a city’s regular property-tax revenue can grow. It also places limits on many property-tax levies that have a fixed maximum rate set by state law.
The proposed Oskaloosa levy has a state-set maximum rate of 67.5 cents per $1,000. If the levy is covered by the new state limits, the city could use the full rate in its first year. In later years, the amount collected could be limited by a state formula designed to hold growth near 2 percent over the prior year.
In plain terms, the levy could start at the full 67.5-cent rate but may not stay at that rate for all 10 years. If property values rise, the city could be required to lower the rate to stay within the state limit.
The city has not said the new state law caused this proposal. City staff said the council directed staff to prepare election documents after a February budget meeting. The city cited rising costs and continued infrastructure needs as reasons to seek another funding source.
Still, the state law matters. Street materials, equipment, labor, and construction costs can rise faster than 2 percent per year. When city revenue is limited, elected officials may have fewer choices. They may need to delay projects, cut other spending, borrow money or ask voters for a separate levy.
Before the election, residents should expect the city to answer several basic questions. Which streets would be funded first? What work would still require bonds? How would the new state law affect the levy after its first year? What other funding sources have been considered? And how much of the city’s street plan would remain unfunded even if voters approve the tax?
The city has included up to $12,000 in its budget for the special election.
The choice for voters is direct. A yes vote would create a new property-tax fund for up to 10 years to help pay for streets and related work. A no vote would stop the new tax, but the city would continue to rely on its current funding, grants, borrowing and delayed projects to address street needs.
