Iowa's legislative squeeze fuels city merger talks

Driving the news: The Taxpayers Association of Central Iowa's (TACI) annual meeting next week will revisit a politically fraught question for central Iowa: When does government consolidation make sense?

Catch up quick: State lawmakers have repeatedly narrowed county and city budget flexibility over the last decade.

• In 2013, Iowa cut commercial and industrial property taxes and created "backfill" payments to reduce the losses to local governments, which will end in about four years.
• In 2023, Iowa created new city and county levy limits, changed budget and notice requirements, added "truth in taxation" mailings and imposed more limits on bonding.

The latest: The Legislature ended its 2026 session on Sunday, sending Gov. Kim Reynolds a property tax bill that would cap most city and county general-levy revenue growth at 2% starting in 2027 — below the U.S. annual inflation rate since 2021.

• It also tightens tax increment financing rules, which redirect future property tax growth to fund public improvements or development incentives.

Behind the scenes: Regional leaders are exploring whether a central entity could better manage the trail system, including the shared use of equipment for snow removal and maintenance.

• Some cities, including DSM, could eliminate their entire IT staff and outsource those services to the county.

• Discussions are also underway about whether the metro's three primary emergency dispatch systems in DSM, WDM and the county could be consolidated, McCoy said.

Reality check: Voters are unlikely to support merging Polk County or any of its 18 city governments, Kurt Thurmaier, a Northern Illinois University professor who studies city-county consolidations, tells Axios.

• Residents generally don't want to give up local control or elected representation, he said.
• Thurmaier will speak at next week's TACI meeting.

State of play: Metro voters rejected major local consolidation proposals in 1994 and 2004 by roughly 2-to-1 margins.

• Legislators and Reynolds' DOGE team have not backed proposals to merge Iowa's 99 county governments.

What's next: TACI's meeting starts at 4pm Tuesday at the Greater DSM Botanical Garden. For reservations, email: [email protected]