Republicans made a pledge in their massive 2013 commercial and corporate property tax cuts that they would protect cities, counties and schools that lost revenue. They promised these local governments that they would replace or “backfill” the 10 percent lost property tax revenue. They promised to backfill this amount with state funds.
Now, Republican legislators are about to break their word and rob schools and local governments of $150 million in backfill per year. Cities, counties and schools are warning that they will be forced to cut services or raise property taxes to make up for the loss.
The Reynolds’ budget is already in the red and Republicans want to further reduce personal income taxes and slash corporate income taxes by another 60 percent. They plan to break their backfill promise and cut more state taxes on the backs of our cities, counties and schools. Their refusal to remain faithful to their 2013 pledge is ethically shameful and fiscally irresponsible.
How can Governor Reynolds and Iowa Republican legislators ever be trusted on tax issues again if they break the promises they made in 2013? Why would Iowans trust them when they are reneging on a tax pledge they made just five years ago? While the Republican leaders have declared their intention to rob local governments of $150 million per year, Governor Reynolds can’t decide what she should do.
Governor Reynolds has been all over the board on whether she intends to keep her promise. In September she said everything is on the table and local governments need to find efficiencies. In a December Atlantic radio interview she admitted cutting the backfill would be unfair.
In September Reynolds said, “But they also need to look for efficiencies in providing services. We’ve done that at the state level, so it’s incumbent on them to do the same thing so we can do everything we can to keep property taxes low…We can’t be afraid of putting everything on the table as we move forward.”
In December Reynolds said, “That is a promise that we made to them…I want them at the table. I want them to be a part of that discussion, but we’ve promised them that and I don’t think we should go back and take away something that we’ve promised midyear. I just don’t think that’s fair to them.”
So which is it? She admits it’s unfair to break her promise but local governments need to find efficiencies. That certainly sounds as if Reynolds is warning them that she plans to break her backfill promise and expects local governments and schools to cut services or raise property taxes to cover the lost backfill. Reynolds is well aware that the Republican legislature is planning to cut the backfill, yet she remains silent.
It appears the Republicans controlling the legislature are simply ignoring Reynolds since she can’t make a decision. The Republican-controlled Iowa House and Senate are moving bills forward that would end backfill funding for local governments. Jack Whitver, the new Republican Majority leader, has been quite clear that he won’t honor the backfill promise Republicans made to local governments in 2013.
“Ultimately that’s $150 million that we’re paying to the cities and counties that we’d like to phase out — I’d like to phase out,” Whitver said.
Local Iowa leaders are warning that breaking the backfill promise will result in local governments and school districts slashing services and staff, or dramatically hiking property taxes. Over the past three years, the state has paid $391 million in backfill payments to local governments.
Republicans’ broken backfill promise would result in huge loses to local government and schools. Here are some of the larger cities, counties and schools and the amount each will lose without the backfill payments. Here’s the link to find the loss to your city, county and school.
Loss to cities: Cedar Rapids $3.9 million; Council Bluffs $2 million; Davenport $2 million; Des Moines $5.3 million; Dubuque $1.8 million; Iowa City $1.5 million; Sioux City $2 million and Waterloo $2 million.
Loss to counties: Dubuque County $900,000; Black Hawk County nearly $1 million; Linn County nearly $2 million; Polk County over $6 million; Pottawatamie over $1 million; Scott County $1.5 million and Woodbury County over $1 million.
Loss to schools: Cedar Rapids Schools $2.4 million; Davenport Schools $2.4 million; Des Moines Schools $5.4 million; Dubuque Schools $1.6 million; Mason City Schools $700,000; Sioux City Schools $1.5 million; Waterloo Schools $1.4 million; Waukee Schools $2.3 million and West Des Moines Schools $2.4 million.
Democrats must hold Republicans accountable for these huge cuts to local governments and schools. Keep in mind, the Republican Senate is proposing an additional $1.2 billion in tax cuts. This is a recipe for a Kansas-like fiscal disaster.
by Rick Smith