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‘Backfill’ funding concern ongoing

Gov. Reynolds supports continuation

Nothing has changed one year after city and county officials expressed serious concern to the Times-Republican about the potential of state backfill phase-out or elimination.

State revenue estimates that have fallen short may have some state agencies anxious, but city and county officials have their own concerns about losing state backfill funding, or in the case of the Marshall Count Board of Supervisors, have planned ahead.

Gov. Kim Reynolds and Lt. Gov. Adam Gregg, who, in their budget and tax reform proposals, retained 100 percent backfill funding, earning kudos from county and city officials statewide.

However, those same officials are closely watching the state legislature.

Their monitoring is justified — some legislators who cast a vote in favor of the backfill five years ago have made public comments saying state revenues don’t justify funding or cities and counties “have outgrown it,” meaning their economies have grown in five years.

All has lead to increased speculation backfill funding may soon be eliminated, phased out or changed

sooner than later.

The backfill funding was approved in 2013, coupled with significant commercial and industrial property tax cuts to Iowa businesses and industry.

Put simply, because local governments would see revenue loss due to the tax reductions, the state promised to “backfill” money to make up for the loss.

In an email to the Times-Republican last November, City of Marshalltown Finance Director Diana Steiner said Marshalltown received $435,345.53 in backfill in fiscal year 2017.

Marshalltown Councilor-At-Large Bill Martin said eliminating backfill, or enduring a significant reduction could result in layoffs, restriction of some programming, or increased fees.

“I’ve been aware of the backfill since its inception, and it’s so critical … that it be maintained, because (the tax cuts) reduced our revenue,” Martin said. “I’m apprehensive that something might be done there. Coupled with the tax giveaways that have been extended over the past several years, it puts us in a really tight situation,” Martin said.

Regardless of what the legislature does or does not do, the Marshall County Board of Supervisors have taken action.

“The county receives (backfill funding of) approximately $244,000,” said Board Vice Chairman Dave Thompson. “I do not have that (exact) number in front of me, but it is fairly close. In our budget we planned for a one-third cut. We figured something (on backfill) was coming. We planned for the worse and hope for the best. We are very prudent in our finances at the county, that is the way we work.”

House Minority Leader Mark Smith, D-Marshalltown, said Friday legislators are negotiating the appropriations bill, which in the long run could determine the future of backfill.

“I am vehemently opposed to the elimination of backfill,” said Smith. “That was something promised to our cities and counties … it would effect essential services if backfill is eliminated.”

Smith said he could not estimate when backfill debate would take place.

“Financially, everything is much slower we have seen for awhile,” he said. “We are scheduled to adjourn April 17 … these (bills) are things they should be moving on … but apparently there is disagreement between Republicans in the House and Senate.”

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Contact Mike Donahey at 753-6611 or mdonahey@timesrepublican.com

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