Webster County Supervisors concerned about losing funds
Proposed legislation would phase out ‘backfill’ to make up for 2013 tax rollback
Counties and other local governments would no longer get the “backfill” funds provided after the commercial property tax relief of a few years ago, under a bill now being considered in the Iowa Senate.
“This would put a pretty big burden on the county if they passed this,” Webster County Supervisor Merrill Leffler said at the board’s Tuesday meeting.
Iowa Sen. Tim Kraayenbrink, R-Fort Dodge, said Senate File 2081 was brought to committee but still has a long way to go before it could become a law; and that discussion with cities and counties should be done before any law passes.
When the state passed commercial property tax rollback 2013, that meant a loss of revenue to counties, Leffler said. A system was put in place to provide that funding back to the counties.
“And basically the amount of property tax we lost because of that, they give us a check, let’s say,” Leffler said.
The new bill is proposing to phase that payment to counties out gradually over three years.
This would cost Webster County in $424,195 in the coming year’s budget, Leffler said. That’s about 1 percent of the total budget of roughly $44 million.
That means the county would either have to cut services, or raise the tax levy on everyone, Leffler said.
Supervisor Keith Dencklau said he was told when this tax rollback passed that the funding would always continue.
“They talked about it for a couple years, and the counties were against it because it was going to take away our funding,” Dencklau said. “They promised they would backfill it. We questioned them on that–at the forum I got up and said, can you tell us you’re always going to backfill that? ‘Absolutely.'”
“But in the law, I think they only guaranteed it for three years,” Leffler said.
Kraayenbrink said he was not in the senate when the tax rollback was passed, but as he understood it the funding was not intended to be permanent.
“It wasn’t written in code that it was (permanent),” Kraayenbrink said. “It always had the opportunity to go away. Once we get accustomed to money coming in, or a certain program, it’s almost like it gets put on autopilot, and it’s never reviewed and it just continues to go on. Now with the state budget the way it is, this is one thing that’s going to be under the microscope.”
Kraayenbrink said the senate file was proposed by Sen. Charles Snyder, of West Des Moines, mostly to “get a conversation going.”
“My suggestion to him was if we know going to be decreasing or lowering the backfill, or eventually eliminating the backfill,” Kraayenbrink said, “we need to get all the partners that are affected, whether its counties, cities, schools, everyone affected by this legislation, and get together and discuss a way we can work through causing the least amount of harm to the entities themselves, and also to the taxpayer.”
During the meeting, Leffler said people could contact their legislators about this issue.
“It’s a law the state passed; they should continue to fund it. Just because they have their financial problems, it shouldn’t be forced down to the local taxpayer,” Leffler said. “I would suggest you contact your senators and representatives in this area, and hopefully express your concern with this bill.”
Kraayenbrink said he has heard feedback from the communities in his district about how it will affect them.
“I want to assure the people in my district that I’m watching it very closely,” he said. “We need to make sure this is done correctly, if in fact this is what’s going to happen.”
Leffler said taxes may have to go up for everyone if this happens.
“My opinion is, it’s typical of state and federal government that it does these things, and it all filters down to the local taxpayer having to pay the bill,” he said. “If we levy for it, then the burden just gets placed on everybody else.
“Commercial property got the benefit, and they’ll actually have to pay a little more, but the majority of the burden goes to the farmers and the residential property owners. So it didn’t alleviate the property tax, it’s just moved it to a different place.”
Kraayenbrink said he believes the idea was that money would be generated through growth, so the state could “slowly wean the cities and counties off this money.”
“My goal is to get the affected stakeholders together and … to have a reasonable discussion on a reasonable solution on how we can wean ourselves off of this, and be fair to the recipients as well as the taxpayers,” he said. “I’ve been very clear that we have to have more than just legislators at the table when we’re talking about solutions to this problem.”