Des Moines among Iowa cities with record debt
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The city's debt reached a record of nearly $800 million last year, according to newly released state records analyzed by Axios.
Why it matters: Balancing debt can play into future decisions to delay things like street or park improvements.
- DSM faces an operating budget shortfall in the fiscal year that starts in July but will still remain under its self-imposed debt limit by nearly $90 million, city finance director Nick Schaul tells Axios.
By the numbers: DSM's debt increased over 76% in the last decade, up from just over $450 million in the 2015 fiscal year, according to the most recent report from the state treasurer's office.
- Debt across all Iowa cities also hit an all-time high, up just over 51% during that same time — from $5.45 billion to nearly $8.27 billion.
Context: Debt is generally associated with large capital projects like sewer improvements, which older cities like DSM have been required to tackle in recent years under federal environmental agreements.
- High debt can also limit fiscal flexibility, increase borrowing costs and leave local governments unable to cover their bills.
Zoom in: Iowa's total outstanding state and local government debt was almost $22 billion in the most recent fiscal year, which ended in June. That's a nearly 4.5% increase from the previous year.
- State agencies reduced debt by just over 10%, but cities, schools and counties increased their loads between 5% and 11%, per the Treasurer's latest report.
Behind the scenes: Property taxes, the most significant contributor to local government budgets, have faced intense scrutiny among Iowa legislators in recent years.
- New limits to property tax growth are ramping up in the upcoming fiscal year and factor into local governments' financial hardships.
What's next: City manager Scott Sanders is scheduled Wednesday to recommend cuts to nearly every department.