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Iowa Legislature may cut "backfill" for commercial property tax relief

Posted: Thu, Feb 1, 2018 5:14 PM

In 2013 the Iowa Legislature changed the tax levy rates for commercial properties in the state.  In order not to have this change impact local governments, the legislature promised to "backfill" the commercial property taxes that would have gone to local governments if the change hadn't been made.

Fast forward to 2018, when the state legislature has to deal with cutting the state budget.  It's likely the state legislature will not provide local governments with this revenue.  City of Decorah officials, when putting together the city's 2018-2019 budget, have not planned on the state sending the replenishment funds which, in the case of the City of Decorah, means around $157,000 in revenues the city will not get.

City officials say it's best to plan not to get the state funds and to add them to the city's reserve fund if they do come in, rather than planning on getting $157,000 and facing a budget shortfall if they don't come in.