(Radio Iowa) – Early estimates show Iowa’s largest city may face a 12-million dollar budget shortfall under the state’s new property tax changes. The new law limits city revenue growth to two-percent per year, with some exceptions. Des Moines Mayor Connie Boesen says the capital city was already facing challenges before the changes, and the new property tax law will hurt city services.
“We’re rebuilding, unlike the newer suburban communities,” Boesen says. “So, we have every bridge we rebuild, all the levees we redo, all the roads that we need to do. Those are things, so I don’t call this a property tax reduction bill, I call it a service cut bill.” The revenue limits take effect in July of 2027, but the city could make cuts this upcoming fiscal year to lessen the impact, such as leaving vacant positions unfilled.
Des Moines city manager Scott Sanders says projected budget cuts will not impact all departments equally, as he says the size of the shortfall is unlike previous years. Sanders says, “The magnitude of the gap is such that all departments will be submitting ideas on where to find savings, because sometimes again it will be revenue as much as cuts.” While the city is projected to face a 12-million dollar shortfall in the budget year starting in July of 2027, the deficit could increase by another five-million the following year.
Des Moines will have public meetings on the budget in July and will look at final budget recommendations in November.
