In 2013, the Iowa Legislature approved sweeping changes in the way commercial property was valued for tax purposes. That led to tax cuts for commercial property owners. As part of the change, legislators agreed to send state money to cities, counties, school districts and other local governments to make up for the money they lost because of the changes. The state currently pays $152.1 million to cities and counties every year.
This week the Iowa Legislature has been debating a bill which would lower those payments. House Study Bill 678 would lower the "backfill" payments to $100 million for the 2019 fiscal year, to $75 million in the 2020 fiscal year, to $50 million in the 2021 fiscal year and to $25 million in the 2022 fiscal year.
The change would have a big impact locally. During the 2017 fiscal year, the Decorah School District received $195,732.81 in "backfill" payments; the City of Decorah received $143,597.18 and Winneshiek County received $116,491.88.
At Monday night's Decorah School Board meeting, the board voted unanimously to adopt a Property Tax Backfill Resolution stating, "The DCSD is opposed to any reduction in backfill for the 2018-2019 fiscal year." The resolution also states, "The DCSD believes that any changes to the backfill should be decided with the participation of local government leaders, with adequate notice, and that every effort be made to avoid local property tax increases."