Backfill plan takes over legislative lunch agenda

Area legislators from left to right, State Sen. RichTaylor, State Rep. Dave Heaton, and State Rep. Jerry Kearns, met with area residents Friday at The Palms in Fort Madison to discuss early session legislative issues. The topic quickly turned to the state's property tax backfill program.







FORT MADISON – Area state legislators were on hand Monday at The Palms to discuss a wide-range of issues in front of close to 30 residents.

State Rep. Jerry Kearns (D-Keokuk),  State Sen. Rich Taylor (D-Mt. Pleasant) and State Rep. Dave Heaton (R-Mt. Pleasant) answered questions ranging from education funding and health benefits to small business assistance and targeted economic development efforts. But the discussion quickly changed to backfills the state told local taxing authorities they would fund to offset various tax credits.


The backfills have become a point of contention in the recent days since Gov. Terry Branstad outlined his proposed 2017-2018 budget.

“Couple years ago we passed commercial property tax realignment so every business every industry and commercial establishment did realize a tax benefit from that and it was considerable.” Kearns said. “We do have a backfill on that and the state replaces taxes lost on the taxing authority. There’s been some indication that they may be part of the cuts this year. I hope that’s not the case. The cities and towns still have to give the break to the commercial owners, but it would come out of their own kitty.”

Heaton said it is true that part of budget reduction talks include possibly taking money away from the backfill authorizations, but he said he doesn’t think it will make it into the final appropriations. But he said most towns are at or above the taxing levels they were at previous to the backfill authorizations.

“There’s about $127 million involved in property tax backfill and there was a discussion to take about $29 million and apply that to appropriation bills,” Heaton said. “I’ve seen the run on the city’s on how the backfill has effected the cities. I could only find one town that was below 100% in property tax revenue compared to where it was when we applied the tax relief. Most cities/towns were between 108-110% of valuation to the point from where we provided the relief til today.”


“I’m sorry but it looks like cities through valuations have been raising values, and the state money is used in addition to the increased revenue they’re taking it in. When we look at backfills. sometimes we think, ‘Wait a minute, are we just paying money to cities to operate in addition to the money they are taking in?'” Heaton said. “I thought we were helping displace some of the money they were losing. So it gets kind of confusing how we approach it. I don’t think it will be in the final appropriation but I just wanted to show you what I’ve seen and how the cities took advantage of that.”

Taylor said Heaton’s numbers were correct with a few exceptions.

“Those numbers are correct, but that doesn’t include multi-family or any mechanism for inflation,” he said “The city’s are still taking a hit on that and the main reason I signed on was a three-year projection that new business would make up that revenue and if that was the case we’d be fine, but that didn’t happen.”

Kearns said if the state backs out of the backfill program, it would be failing the residents and the taxing authorities of the state.

“We promised we’d do that. The state promised we’d make that up and if we don’t, we broke our promise,” Kearns said. We’ve been a little lax on that in the past with homestead and military exemptions and we’re supposed to replace that too, but we don’t. Regardless of how well they may be doing or how the economy may improve we said we would do that and if we don’t we’ve failed.”


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