In 2013 state law was changed to reduce the amount of taxes that local government get from commercial and industrial properties. The backfill is a reimbursement from the state to local governments for this loss. The total payment for the current fiscal year was over $152 million, of which $68,616.61 went to Benton County, $154,054.91 went to cities in Benton County, and $156,567.26 went to schools in Benton County. These reimbursements help ensure local governments aren’t forced to drastically increase property taxes on your home or farm, or to make cuts to the services you depend on.
Despite Governor Reynolds’ full funding of the backfill in her proposed budget, there are currently two pieces of legislation before the Iowa Legislature that would phase-out or greatly reduce funding for the backfill. Both bills are troubling for many reasons. First, the taxable value of commercial and industrial property hasn’t even returned to the levels from before the legislation was implemented, so if the backfill is significantly reduced or eliminated, counties will be receiving less tax revenue than they did five years ago. Second, both plans call for reductions far too rapidly for most counties to absorb without significant property tax increases or reductions in services. Third, the phase out begins in FY 2019, and counties have already set their budgets for FY 2019, so this would force immediate budget amendments to raise property taxes or cut back on services.
As Benton County works to continue to provide the high quality local services that you deserve and depend on, we want to do so without putting the burden on you – local property tax payers. We will continue to urge our legislators to back the backfill, and we encourage you to join us. Please ask your legislators to support the Governor’s proposal and to fulfill its commitment to replace their reductions from commercial and industrial property tax revenue
Benton County Auditor