Local Governments Should Budget Like a Citizen

This article was featured in the Council Bluffs The Daily Nonpareil.

Iowans and their state government know how to live within their means; it’s time local governments do the same.

If you are following the 2023 Iowa legislative session, then you know there is a lot of proposed legislation aimed at reforming and lowering the property tax. This is because local governments in Iowa have a spending problem. Since 2000, total property taxes collected have increased nearly 120%, well outpacing inflation. The increased spending has put a burden on taxpayers that cannot be ignored.

Iowans have to base their household spending on how much revenue they bring in. You look at your household income — aka your paycheck — and make decisions based on the amount it shows. Plenty of us would like to take the family to Disney World or tackle that long-overdue home renovation this year, but if it’s not in the budget, it just has to wait. We can only spend what we have. Unfortunately, public officials often think the rules are different for them.

Taxpayers can’t spend more than they make every year, so why is it so easy for local governments to keep spending?

The devil is in the details. The property tax cycle in Iowa takes a total of 18 months from start to finish, beginning with the assessor. The amount of your property tax bill is determined when your local government establishes its budget. Your city and county decide how much they want to spend, and then the county auditor determines the levy rate needed to generate enough revenue to fund the resulting budgets. Sounds backwards, right?

Sure, cities and counties have limitations. A 2019 law applied a 2 percent spending cap on cities and counties. However, this cap is easily bypassed and hasn’t proven effective for reducing spending in our communities. To make matters worse, taxpayers who voice objections to their city council or county board budgets during public hearings can only demand reductions in the published property tax levies, not changes or removal of budget items with which they have issues.

Across an 18-month process, plenty of time is available for local officials to forecast revenue and to budget responsibly without continually increasing taxes. Sure, that would mean every request wouldn’t be funded, but it would also mean a single mom living paycheck to paycheck wouldn’t have to suffer a property tax increase year after year.

Thankfully, governments don’t universally budget beyond their means in Iowa. The state government has done an excellent job with prudent budgets. Over the last decade, the Iowa Legislature has slowed the growth of state spending, resulting in multiple rounds of tax cuts. Yet, when the state enabled property tax relief by transferring the county mental health levy to the state’s General Fund, 48 of Iowa’s 99 counties did not pass the full savings on to their local taxpayers, choosing to spend them instead.

Iowans and their state government know how to live within their means; it’s time local governments do the same.

 
Skip to toolbar