Des Moines City Council Approves $11.5M Budget Cuts, Citing Iowa Property Tax Law

Des Moines city leaders have approved an $11.5 million budget reduction package that cuts services across nearly every department, a move officials blame on Iowa's new property tax law.

The City Council voted 6-1 on Monday, Sept. 14 to approve the service cuts and new revenue options, aiming to close a $12 million deficit before the 2028 fiscal year begins July 1, 2027.

Why are the cuts happening?

City officials point to Iowa's recent property tax-cutting legislation as the primary cause of the shortfall. The law caps growth of local governments' general fund levies at 2% per year, with exceptions for new construction. That cap falls below the U.S. annual inflation rate.

The legislation is projected to lower Iowans' property tax payments by $4.2 billion over six years. City leaders say the city faces an estimated $5 million additional hit the following year.

City Manager Scott Sanders told the council the new law is the latest in a decade of damaging changes to the state's property tax system that make it increasingly difficult for the city to provide services to residents.

What does the initial budget package include?

Almost half of the initial savings, nearly $5.5 million, will come from staff reductions including 15 layoffs, according to a City Council memo. Another roughly $2.9 million will be in program reductions. The city also estimates it can add $3.1 million in new revenue through new and increased fees.

The cuts include eliminating positions in the Des Moines Fire Department, including a firefighter and analyst, as well as park maintenance staff. The package also reduces library hours, closes small library branches one day per week in addition to Sunday, and closes the larger Central and Franklin Avenue libraries on Sundays.

Public safety concerns dominate debate

Council member Linda Westergaard voted against the package, expressing dissatisfaction with the elimination of public safety positions.

We're asking our police and our firefighters to go out there every single day, put their lives on the line for us... and then we're not even going to provide them with the staffing that they need. I can't support it.

Council member Joe Gatto supported the budget package but called it troubling for public safety. He insisted the city would need to find a solution for adding a new fire station and additional firefighters and police officers.

I don't think any resident paying the taxes that all of us do are going to feel safe with the response times if we keep cutting this and keep going down that road. And I know that we didn't do this by our choice, but I will need to see in January how we're going to move forward.

Council members warn of more difficult cuts ahead

Council member Rob Barron lamented the cuts to the Des Moines Public Library, parks, police, fire and the Community Impact and Relations Department, calling the decision a major step back for the city.

The next $5 million are going to be incredibly hard. And I don't know where that process goes. I don't know if we find consensus on that or not.

Council member Mike Simonson expressed concern about where the city will find the additional cuts to reach $12 million.

We're going to go through this again in January, and we're going to go through this every year, and I'm concerned about the future. As we all are.

Budget survey shapes decisions

The city's online budget survey received 2,303 responses this summer. Nearly 90% of respondents were city residents, business owners or property taxpayers.

Nine of the 10 most-favored options from the survey made it into Sanders' recommendation for initial cuts. These included eliminating Des Moines' $400,000 annual floodplain property buyout program, which 88% of respondents selected.

Also among the most popular savings options was selling off unused or underused park space, favored by 80% of respondents, as well as saving $165,000 by hiring fire department recruits with paramedic certification, which 75% of respondents backed.

What's next for Des Moines?

Monday's council vote marked the first round in what city officials say will be a years-long effort to tighten purse strings as a result of the state's property tax cap.

The city was still recovering from the $11.8 million hit it took to the general fund to address a $17 million shortfall in fiscal year 2026. That spring, the City Council approved a budget that eliminated programs, including the city's sustainability office, and raised parking fines as well as trash and sewer rates.

The general fund, which makes up the largest portion of the city's nearly $855 million operating budget and is largely funded with property taxes, pays for all of Des Moines' operations and departments.

City leaders began sounding alarms about the effects of the legislation even before Gov. Kim Reynolds signed it into law in May. As City Council members approved the 2027 fiscal year budget in early April, including a $256 million general fund, Sanders told council members to prepare for months of tough financial conversations.

The council will revisit the budget in January to identify additional cuts needed to reach the $12 million target.