State forcing county into budgetary shell game

LEVY IMPACT

We get two gears. We either run at $5.85, which is overdrive and overtaxing county residents, or we can run in $3.50 where we cannot afford to run and decimate county services. Let that sink in a bit.”

Garry Seyb, Lee County Supervisor Chairman

LEE COUNTY – The Lee County Board of Supervisors continue to be dismayed with how the state is reshaping the ability of counties to manage their own budgets.
In his report to the board, chairman Garry Seyb said the county is now playing a shell game with finances and the state has forced their hand.
The county had planned to reduce its general levy by 58.7 cents per year for the next four fiscal years to move from a current levy of $5.85 to the state’s mandated FY 2029 maximum levy of $3.50. That’s a difference of $2.35 or 58.7 cents per year.
Seyb said he had a long conversation with officials at the Iowa Dept. of Management who have indicated that the county cannot reduce their general levy from the $5.85 because then they wouldn’t be at the state maximum on general levy, which triggers the general supplemental.
“We did receive word from the Dept of Management that we will not be able to reduce the $5.85 any until we drop it to 3.50. Their argument is a county must be at max levy to have general supplemental,” Seyb said.
“We get two gears. We either run at $5.85, which is overdrive and overtaxing county residents, or we can run in $3.50 where we cannot afford to run and decimate county services. Let that sink in a bit.”
Seyb then outlined a workaround where the county would in essence be playing a shellgame and moving expenses currently paid out of general supplemental into general basic to reflect the need for the $5.85. The move would then reduce the need in general supplemental.
Budget Director Cindy Renstrom said she would have to move $984,000 from general supplemental into general basic. That dollar figure reflects the 58.7 cents per 1,000 the county was planning to reduce the general basic levy.
“We are reducing your taxes, but not the general fund levy itself. Your overall tax rate will drop the ¼ of the amount that is needed to get to 3.50 by 2029. It’s bookkeeping and a shellgame that we should not have to play,” Seyb said.
“We don’t have a choice but to play with general supplemental to reduce taxes. I want to be as clear as I can and that’s as clear as I can be without feedback from state level.”
Seyb said he’s been in contact with State Sen. Jeff Reichman and State Rep. Martin Graber and both have agreed to look into the issue at the state level.
“Neither one of them had a clear grasp of why that would be that way, but they were both going to look into it. Both are concerned the county was going to have to do that,” Seyb said.
“We’re going to make it this year, but I don’t know how we’re going to make that work next year.”
Renstrom said with the new mandate for 2029 at $3.50, the county would then have to move those expenses back to the general supplemental to get in line with the mandate.
Renstrom said there are 40 counties in the state that are currently over the $3.50 levy and said communications have been started with other county auditors and many of them were planning the same course of action Lee County was, but now are in the same boat.
“We sent messages to other auditors that a lot of counties were going to drop theirs down and are finding they cannot do that. At this point, I’m going through the budget and will have to move $983,710 out of General Supplemental and into General Basic,” she said.
In other action, the county board approved Schickedanz Construction as the contractor for the new Lee County EMS facility in Keokuk. The contract for the building is close to $1 million and construction is expected to start in March.