Cities across Iowa will be paying close attention to the coming legislative session, as they await the decision on the backfill issue.
In 2013, the legislature passed a 10% commercial and industrial property tax rollback in an effort to attract more business to the state. They promised the counties, cities, and school districts they would backfill what was lost in revenue due to the tax cuts. It now appears that promise might be broken. City Administrator Sven Peterson says this could leave Perry short $40,000 in the general fund and $40,000 in debt service, benefit levy, and other levies for the coming year’s budget. “You look at $80,000, it might not seem like much in a $10 million budget, but we carry such a tight budget that really every single penny and every dollar really matters. And that’s $40,000 that we’d have to come up with in our general fund.”
The state legislature is presently having budget issues, which has left them looking for ways to increase revenue or cut expenses. The backfill has been seen as something that could be on the chopping block. Peterson says that’s caused concern in many communities. “Really why this affects us so much, and why this is such a sensitive topic with cities, is because when they passed this rollback, they promised adamantly that they would continue the backfill. And obviously that lasted for about four years, and now they’re probably going to be looking at cutting it. If they do cut it, hopefully it’s a gradual decline over a couple years, not just one big swing of the axe type of deal.”
Peterson adds, the cities are hopeful the state will keep their word and keep up with the backfill, but Perry at least is formulating plans if they don’t. To hear more from Peterson, listen to Tuesday’s Perry Fareway Let’s Talk Dallas County program at RaccoonValleyRadio.com.