The City of Dubuque, Iowa, is in the final stages of adopting its budget for Fiscal Year 2027, which runs from July 1, 2026, to June 30, 2027. On Tuesday, April 28, 2026, the Dubuque City Council will hold a public hearing at 6:30 p.m. in the City Council Chambers (second floor of the Historic Federal Building, 350 W. Sixth St.) to adopt the operating and capital budgets. This meeting marks the conclusion of a multi-week process that began in March with discussions on the property tax levy.

City Manager Mike Van Milligen has recommended a balanced approach that includes a modest property tax rate adjustment, utility rate increases, strategic use of tax increment financing revenues, and investments in core services like public safety, streets, and infrastructure. The proposal aims to maintain fiscal responsibility while addressing aging infrastructure, inflation, and potential future state-level property tax reforms in Iowa.

Property Tax Proposal at the Center of the Discussion

Van Milligen recommends a 1% increase in the city’s underlying property tax rate, raising it from $10.0637 per $1,000 of taxable value in FY2026 to $10.1648 per $1,000 in FY2027. This would boost the total property tax “asking” (levy) from about $29.87 million to approximately $31.94 million, representing a 6.93% increase in property tax revenue, or roughly +$2.07 million in additional funds. 

For the average residential homeowner (property valued at around $213,211), this translates to an estimated $26.68 increase in the city portion of their annual property tax bill — from $889.20 to about $915.88, or roughly +3.0%. This figure accounts for Iowa’s residential rollback rules, which affect how taxes are calculated on the first $150,000 of value.

Impacts vary by property type:

•  Lower-value commercial and industrial properties (under $300,000) could see small decreases due to rollback mechanics.

•  Higher-value commercial properties (average ~$624,927) might face increases of around $770 (+18.1% in some cases).

•  Industrial properties (average ~$731,693) could see rises of about $910 (+17.9%).

Van Milligen has emphasized historical context: Since 1989, the average annual increase in the city portion of property taxes for homeowners has been about +1.52% (roughly +$9.92 per year). Even with the proposed change, Dubuque’s rate would remain among the lowest among Iowa cities with populations over 50,000 — significantly below the average of peer cities and far under the highest (Waterloo, which was 116% higher in FY2026).

The council held a public hearing on March 23, 2026, to set the maximum levy. It approved the proposed maximum on a narrow vote, meaning the final rate on April 28 can be lowered but not raised. Each 1% reduction in the homeowner impact would cut city revenue by approximately $300,000, potentially requiring adjustments to proposed improvements or grants.

Broader Revenue and Expense Strategies

The property tax proposal is part of a larger package designed to avoid relying heavily on one-time funds for ongoing expenses. Key elements include:

•  Greater Downtown Tax Increment Financing (GDTIF): In FY2027, the city plans to repay about $5.3 million in internal loans from TIF districts. Starting in FY2028, Van Milligen recommends claiming only 75% of GDTIF revenues, returning the remaining 25% (about $1.2 million annually to the city, plus more to schools and other taxing bodies). This aims to share benefits more broadly and prepare for state reforms but reduces available funds for city projects by roughly $3.4 million per year going forward.

•  Utility Rate Adjustments (enterprise funds, separate from the general budget):

•  Water rates: +3% (base charge from $22.50 to $23.17).

•  Sanitary sewer, trash/curbside collection, and stormwater fees: +9% each.

•  Low-income customers qualify for a 50% discount on base rates.
These increases support infrastructure upgrades, including lead service line replacements, odor mitigation, and system resiliency amid EPA requirements and growing needs.

•  Reserves and Other Revenues: The budget begins with healthy general fund reserves (over 25% of revenue). Van Milligen advises against using these for recurring costs to preserve flexibility for future years. Other revenues include franchise fees, riverfront leases, ambulance fees tied to service expansions, and state backfills, though some areas like local option sales tax and interest income are projected to decline.

Budget Priorities and Investments

The recommended budget aligns with City Council goals adopted in September 2025, focusing on:

•  Public safety: Adding positions (e.g., nine firefighters funded partly by federal grants and ambulance fees).

•  Infrastructure: Street and corridor projects, park maintenance, and capital improvements.

•  Core services: Wage adjustments (3–5%), health insurance and pension costs, and departmental operations.

•  Long-term planning: Preparing for potential state property tax changes that could reduce local revenue options in FY2028 and beyond.

Non-recurring items draw from sources like Inflation Reduction Act rebates and TIF repayments, while recurring improvements are tied to sustainable revenues where possible. Van Milligen has stressed avoiding “self-inflicted” future budget holes by not funding ongoing expenses with temporary dollars.

Public Input and the Road to April 28

Residents have had multiple opportunities to engage:

•  Departmental budget presentations occurred on dates including April 7, 9, 13, 15, 16, 21, and 22.

•  An online budget comment form is available on the city’s website.

•  Written comments can be mailed to the City Manager at City Hall.

•  The public is invited to speak at the April 28 hearing.

Materials for review include the City Manager’s Recommended Budget Message, presentation slides, Resident’s Budget Guide, and Capital Improvement Program details — all accessible on the city’s FY2027 Budget page (cityofdubuque.org/3252/Fiscal-Year-2027-Budget). Meetings are streamed on CityChannel Dubuque, the city’s website, Facebook, and YouTube.

Context, Nuances, and Potential Implications

Dubuque’s approach reflects broader challenges facing Iowa municipalities: rising costs for infrastructure and personnel, uncertain state policies on property taxes, and the need to maintain strong credit ratings (Dubuque currently holds an Aa2 from Moody’s). Assessed value growth, particularly in areas like the North End benefiting from prior city investments in flood mitigation, parks, and sewers, has helped offset some pressures, though not uniformly.

Edge cases in the proposal include varied impacts across property classes due to rollback rules and assessment cycles. Lowering the tax increase could preserve short-term affordability for some residents but might slow progress on safety enhancements, maintenance, or grant programs for community agencies. Conversely, the recommended path supports long-term sustainability amid anticipated reforms that could shift more burden to remaining local revenue tools.

If approved as recommended, the budget would continue Dubuque’s pattern of restrained growth while funding essential services. However, council members have expressed interest in exploring options, such as using reserves or trimming priorities, during the review process. The final decision on April 28 will set the course for city operations in the coming year.

For the latest agendas, videos of prior meetings, or to submit input, visit the City of Dubuque website or contact the Finance Department. Public participation remains key to shaping a budget that balances immediate needs with future resilience in a changing fiscal landscape.