Local government officials warn property taxes on homes and farms will rise if a 150-million dollar annual state payment to cities and counties ends. State lawmakers ordered a 10 percent cut in commercial property tax rates in 2013 and the state payments were promised back then to make up for lost local tax revenue. House Republicans have crafted a proposal to gradually eliminate those payments over the next four years. Lucas Beenken of the Iowa State Association of Counties says going from 150-million in state support to zero in five years will be a huge hit to local governments.

“Far too rapid to be able to just absorb without raising property taxes significantly or looking at cuts in services,” Beenken said. Robert Palmer of the Iowa League of Cities says while some urban and suburban areas have seen development and growth in property taxes, much of the state has not. “Many more areas across the state still need the attention of the state legislature,” Palmer says.

Some officials are asking legislators to give cities and counties the authority to levy new property taxes specifically for police and fire department budgets. Others say the cuts Iowa lawmakers ordered in property taxes on apartment buildings have been a hardship and should be repealed. Doug Struyk is a lobbyist for the cities of Des Moines, Iowa City and Waukee where there are large tracts of apartments.

“Those are large users of our services,” Struyk says. “There are students who go to school there. There are domestic problems that happen there. They certainly use a lot of our roads and infrastructure, yet we have declining revenue coming from those areas.”

Community colleges eventually would lose three-and-a-half million dollars in state support annually under the House G-O-P’s plan. Public school districts would be impacted, too. Josh Hughes, president of the Interstate-35 School Board, says his district would take a 20-thousand dollar hit. “That’s more than half of a new teacher’s starting salary,” Hughes says.

House Appropriations Chairman Pat Grassley says Republicans will consider all the input and the plan could be delayed a year. However, Grassley says legislators still need to act this year — even if the reduction in state support doesn’t start until July of 2020. Grassley says that would give local officials enough time to cut budgets or raise taxes to adjust to reduced state support.

(Radio Iowa)