Subcommittee Discusses Eliminating Property Tax Backfill

A subcommittee was held Tuesday to begin discussions on eliminating the property tax backfill allocated to local governments by the state. The backfill was to offset the 10 percent rollback of commercial and industrial property taxes put in place during property tax reform in 2013. Local governments receive this backfill based on a formula, and the appropriation from the state annually totals approximately $152 million.

SF 2081 would phase out the backfill by a third each of the next three fiscal years beginning in FY19. Several stakeholders were in attendance and spoke about their concerns with the bill as currently drafted. Sen. Charles Schneider (R-West Des Moines), who chaired the subcommittee, mentioned this bill is starting a conversation on the future of this issue and that talks will continue. The bill did advance, but we expect there could be changes to the legislation as it moves through the legislative process and tax reform discussions continue.