The legislature’s top Republican says state payments to Iowa cities and counties to make up for reduced local property taxes are likely to end soon.
“One thing I know is that we can’t fund both state government and local government,” House Speaker Linda Upmeyer, a Republican from Clear Lake, said during taping of the “Iowa Press” program that airs tonight on IPTV.
Upmeyer voted for the 2013 bill that ordered a 10 percent reduction in commercial property tax assessments in cities and counties.
“Some of us remember the debate back when we did that property tax bill,” Upmeyer said. “A five-year phase out or a five-year ending was contemplated in that bill and in that bill until the last moments before it was agreed to and passed so, in many people’s minds, that always had an end point.”
Cities and counties are getting $150 million from the State of Iowa THIS year to compensate for the reduced commercial property tax rates state officials approved five years ago. City officials say this year’s $150 million state payment isn’t covering all the lost local tax revenue and, if the state payments end, local government services will be cut.
When asked about the payments, which local officials call “backfill” from the state to cover tax revenue loss, Upmeyer said it’s time to begin lowering the amount of money the state is sending to local governments because the state has other spending priorities.
“The second fastest growing expenditure in the state is actually dollars sent to local governments,” Upmeyer said.
Governor Kim Reynolds and Jack Whitver, the new Senate GOP leader, have expressed similar sentiments about phasing out these state payments to cities and counties as well. In December, Governor Reynolds said she wants city and county officials to be involved in the negotiations about how and when the payments end.