The reorganization of county finances was accomplished by the
Iowa Legislature in 1983. All
existing funds were combined into a minimum of four funds: General Fund, Ru=
ral
Services Fund, Secondary Road Fund, and Debt Service Fund. Previously, some funds had levy li=
mits
and were controlled to some degree by the county board of supervisors. Other funds created by state manda=
tes
had no levy limits. The count=
ies
had no control over the cost of such funds. If a county desired to increase a =
levy
limit or transfer money from one fund to another, it was required to go thr=
ough
a tedious process of voter approval by referendum or State Appeal Board
approval.
Under the current system, all countywide levy funds are
consolidated under the General Fund. For unincorporated areas, funds are
consolidated under the Rural Services Fund. Thus, the current system simplifie=
s the
budgetary process and provides more control to the county in managing its o=
wn
resources. A county can trans=
fer funds
or change levy rates without seeking voter approval or permission from the
State Appeal Board. Thus, the
current system, in addition to greatly simplifying the budgetary process,
provides more control to the county in managing its own resources.
The finances of counties are affected by many different facto=
rs.
Some of the variation results from decisions made by county officials. Some=
are
due to factors outside the control of the elected officials such as state
mandates, a county’s size, the economic status of its residents, or t=
he
proximity of similar services provided elsewhere. The amount of revenue
available for a county is influenced by rising or falling property values, =
the
use of fee-based services, intergovernmental grants for projects, and many
other interrelated factors.
What do counties spend their money on?
There are eight major areas in which counties spend their rev=
enue
to provide services. The
descriptions below include the percent of total expenditures by service area
for fiscal year 2004 and an example of what services may be provided in each
area. The type of service and
extent to which each is provided varies among counties. Additionally, the examples given d=
o not
constitute an exhaustive list. The
eight service areas are:
• &nbs=
p; Roads
and Transportation (22.87%) – road maintenance and construction, mass
transit
• &nbs=
p; Mental
Health, Mental Retardation and Developmental Disabilities (18.51%) –
services to persons with mental illnesses, mental health facilities
• &nbs=
p;
• &nbs=
p; Non-Program
Expenditures (10.69%) – debt service and capital projects
• &nbs=
p; Administration
(10.25%) – policy and administrative services, insurance
• &nbs=
p; Physical
Health and Social Services (10.02%) – chemical dependency
=
; programs,
services to the poor, veterans, and children and families
• &nbs=
p; Environment
and Education (6.05%) – conservation, animal control, economic
=
; development
• &nbs=
p; Governmental
Services to Residents (3.3%) – elections and other state
=
; administrative
services
County expenses may be affected by the demographic, geographi=
c,
historical or political landscape of a given county. Large swings in expenditures may r=
eflect
increased demands caused by extraordinary weather events or physical struct=
ure
expenditures (county jail, courthouse, etc.). Expenditures are also affected by =
public
safety events or large-scale investigations of criminal activity. Some factors have a continuing eff=
ect on
county finances, while others might be one-time events. Mental health services, road
maintenance and public safety are by far the most expensive services that
counties provide to citizens.
Together, they account for about 60% of all county expenses. In addition, increasing state and
federal mandates are giving counties responsibility for providing more publ=
ic
services. Citizens are expect=
ing
more and better services from their counties, yet they are also requesting
lower property taxes. All of =
these
factors put intense pressure on county officials to provide exceptional
services at a low cost to taxpayers.
=
Where
do counties get their money?
Iowa’s counties have several revenue sources,
including: property taxes; ot=
her
county taxes such as utility excise taxes and local option sales taxes (LOS=
T);
state aid including road use taxes and state reimbursement of property tax
credits; federal government revenue sharing and grants; user fees; licenses=
and
permits; and other charges. A=
mong
those sources, property taxes account for the largest portion of county
revenue, at about 43%.
Intergovernmental revenue, in the form of state or federal aid, is a
close second, accounting for almost 42% of county revenues. Utility excise tax revenue and LOST
revenue combine to provide just over 5% of county revenues, while the remai=
ning
10% comes from other miscellaneous sources.
While these aggregate figures provide a decent guideline,
individual county revenue sources may vary dramatically. Only about two-thirds of
Property T=
axes
Property taxes are imposed by local governments, includ=
ing
cities, schools and counties, against most real property in
For tax purposes, all property is divided into
classifications. The primary
classifications of property are agricultural, commercial, industrial and
residential. In 2003, homeown=
ers
paid about 42% of all property taxes; farmers paid about 32%; and business
owners (commercial and industrial property) paid about 22% of all property
taxes. The remaining 4% was p=
aid by
owners of utility property, railroads, or other minor classifications of
property. In total, property =
owners
paid just under $650 million in property taxes to county governments in fis=
cal
year 2003 (July 1, 2002 thru June 30, 2003). Property owners paid just over $3
billion in property taxes to all local governments combined.
The revenues generated by property taxes help to pay for
public schools, city streets, county roads, police and fire protection, and
many other services. Although
counties are responsible for collecting all property taxes, the largest por=
tion
of property tax revenues goes to school districts. In fact, county governments receiv=
e less
than a quarter of all the property taxes they collect.
*Information for this publication taken from “Evolution=
of
County Government in Iowa” by State of Iowa Office for Planning and
Programming; “New Directions for County Government” by Iowa
Advisory Commission on Intergovernmental Relations.
For Further Informati=
on
Contact:
(515) 244-7181 Fax: (515) 244-6397<= o:p>
Web S=
ite:
www.iowacounties.org