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Backfill resolution passed

Backfill reform by the Iowa State Legislature in 2013 created reduction in funds to city’s general budget

April 19, 2018
Amy H. Peterson - Staff Writer (apeterson@esthervillenews.net) , Estherville News

At Monday night's council meeting, the Estherville City Council passed a resolution supporting the continued funding of the backfill by the Iowa Legislature to help ensure local governments are able to provide effective community services.

City finance director Beth Burton said the resolution would, "let Des Moines know we need this money. This money means a person, the ability to complete snow removal, we really need it for our general fund."

In 2013, the Iowa Legislature passed Senate File 295, which included the commercial industrial property tax replacement claims.

The state currently pays $152.1 million to cities and counties every year to help offset lost revenue from sweeping commercial property tax cuts approved by the legislature.

This presented a promise made by both Republicans and Democrats to cities, counties, and school districts across the state that the State will replace, or "backfill" property tax losses through a standing appropriation.

Republican lawmakers say the move is needed because of the state's budget situation. The Iowa Department of Revenue says incoming tax revenue has consistently fallen short of the quarterly estimates they use to set spending levels. Legislators are cutting services, dipping into reserve accounts, and cutting agency budgets to cover revenue shortfalls.

The reduction and gradual elimination of the backfill, proposed for fiscal year 2019, would, according to legislature watchers, force cities to either cut essential services or raise taxes at the last minute, or both.

Council member Dave Seylar said, "The legislature made a promise when they made that law. I was afraid of this at the time, and sure enough this has come up."

Council member Gene Haukoos said, "They said it would increase the number of businesses, but in small towns, that didn't happen."

The city of Estherville received $86,414.75 in backfill payments for fiscal year 2017. The Estherville Lincoln Central school district received $119,760.03.

 
 
 

 

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