The annual budget season is already a taxing stretch for Marshalltown city staff and the city council.

With the imminent loss of backfill payments from the state, City Administrator Jessica Kinser said conversations about the budget will happen sooner than usual.

Since 2013, the state has made backfill payments to communities to lessen the blow of restrictions placed on local governments on commercial property tax rates. The state has been paying more than $152 million to cities and counties annually.

Republican legislators voted to scale back tax replacement payments in coming years while restrictions on commercial and industrial property taxes remain in place. That means county and city governments have decisions to make about their budgets with less of a revenue stream.

“We’ve been given time,” Kinser said. “They didn’t do something to us for this fiscal year that we already budgeted for.”

In the fiscal year beginning July 1, 2016, Marshalltown received almost $252,000 in tax replacement money. For the current fiscal year ending June 30 it received about $226,000. Staff budgeted $206,000 for the next fiscal year.

According to Kinser’s calculations, Marshalltown will no longer receive tax replacement payments starting for fiscal year 2030, which begins July 1, 2029.

While Kinser said the end to backfill payments is not a surprise, there are few avenues to take to recuperate lost revenue in this instance. Marshalltown — like a majority of local governments — is already at its maximum tax levy.

“My hope is with the American Rescue Plan we do have the ability to recover some revenue loss. That will make things right for a few years,” she said. “We have very limited revenue. If you put it in one place you’re taking it from another. If you can’t find revenue other than taxes, you cut it. Unfortunately that’s the reality.”

By July or August this year, Kinser expects the Marshalltown City Council to look into some of its larger budget questions for the next fiscal year which it normally wouldn’t need to address until December or January. She does not expect any major issue though. In her experience with the general fund, for example, the council and staff have been able to resolve any issues well ahead of time.

“We’ll budget in January, then people will retire; We’ll go back and review wages by department and make sure we’ve captured any changes to see what our real budget is,” she said. “It’s hard because it’s an election year and we have a number of council seats up for election. But the budget talk can’t wait for elections. We have to be doing as much of that planning as possible.”

The various department leaders are crucially helpful when it comes to finding ways to make necessary projects possible while meeting the budget, according to Kinser.

“I feel very lucky that I have a department head team here who knows and respects our financial situation,” she said. “If there’s something we want to do that’s outside that norm, they make sure we have scoured every single source out there.”

As city officials begin to weigh budget decisions impacted by the loss of backfill payments, Kinser encourages Marshalltown residents to stay tuned for opportunities to let their voices be heard on these issues in council meetings.

“It might be a slow start before they see things but just know we’re at the point where we need to have those conversations,” she said. “Their input matters. There will be opportunities for them to speak in and they can decide if that’s something they want to talk with their state legislators about.”

Contact Joe Fisher at news@timesrepublican.com.