Cities, Counties, and Schools Could Lose More Than $150 Million in Backfill Payments From State

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PERRY, Iowa  --  "When this bill was passed in 2013, the legislature made a promise to cities, counties, and school districts that they would make those backfill payments in a standing appropriation," said Perry City Administrator Sven Peterson. "And for them to, only five years later, go back on that promise is really disheartening."

Peterson says cities throughout Iowa need that backfill money.

"The cities rely on their tax base, the state cut their tax base, so we rely on that backfill," said Peterson. "And our citizens rely on us to provide services to them."

But without backfill payments from the state, those services may be forced to cut back.

"In Perry, we'd be looking at about an $80,000 cut to our revenues," said Peterson. "About $41,000 of that would be in our general fund, which would either have to be made up in cuts and over the years with other things that have gone on, we've cut to the point where right now, it's gonna be either services, jobs, or the possibility of increase in fees."

Perry Police Chief Eric Vaughn is concerned about the impact the loss in revenues could have on his department.

"It could affect all kinds of things from maintenance on equipment to maintenance on vehicles to funds that we provide to personnel," said Chief Vaughn. "Not only full time officers, but we do have part time positions, not only as police officers but as dispatchers, and that might cut that further and not allow us to give those persons as many hours, also."

And the timing couldn't be worse, as cities must have their Fiscal Year 2019 budgets certified by March 15th, which makes planning for the future difficult when it's unclear what state lawmakers at the capitol are going to do.

"We'd have to go back and re-look at everything to figure out where we can make up those shortfalls," said Chief Vaughn.

And for small communities like Perry, that's no easy task.

"We don't have, you know, a huge income with the city of Perry, you know, we're not as big a department or a city as a Des Moines, West Des Moines," said Chief Vaughn. "It's going to be harder for us to make up those small amounts than maybe one of those other cities could."

Alan Kemp, Executive Director of Iowa League of Cities, sent Channel 13 the following statement in regards to this issue:

"We are disappointed to see SF2081 pass out of subcommittee. In 2013 when the legislature enacted sweeping property tax reform, they made a commitment to local governments by backfilling revenue losses on commercial and industrial property. This legislation phases out these backfill payments over just a two year period beginning in FY2019 - a budget that many cities have just approved. While the impact will be unique in each city, this will result in forcing cities to make tough choices about cutting services valued by their citizens. Many cities are already struggling with declining revenues and populations. This will harm all cities and not help revitalize rural communities."


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