Attorney Jim Carney is taking a look at state of Iowa budget figures and wondering where the dollars will come from to pay for funding commitments made by previous legislatures.

He sees a $483 million gap between total budget funds of $7.4 billion for the upcoming fiscal year, budget requests from state department heads and the built-in expenses that have been committed by previous acts of the Iowa Legislature.

Included in the gap is $133.8 million in backfill — funds promised by the state to local governments to soften the loss of commercial property tax dollars — and tax credits to owners of commercial properties. The backfill and the tax credits were part of landmark property tax legislation that took effect last year.

Carney is a longtime lobbyist for the Iowa Commercial Real Estate Association.

“The big question is the budget and what we can do about commitments that have already been made,” Carney said.

In Polk County alone, businesses claimed nearly $6 million in property tax credits and the backfill from lost commercial property taxes amounted to nearly $18 million last year, said Polk County Treasurer Mary Maloney. 

“I think the county was aware that the danger of getting the tax cut passed is that if you don’t make that up, it will hit the cities and counties hard,” she said.

Maloney and Des Moines City Manager Scott Sanders said any shortfall is likely to show in fiscal 2017 budgets.

Another issue that might get some attention is the $20 million cap on tax credits that help pay for housing projects. Legislation passed last year changed portions of the state development incentive law to spread the credits across the entire state, rather than in the primarily urban areas where most of the credits had been used in the past.

Kris Saddoris, vice president of development for Hubbell Realty Co., remarked that $20 million could be used in any square block of downtown Des Moines development.

Although the legislation took effect last year, rules for its implementation have yet to be adopted, so it is unknown how many development projects in the state will seek tax credits.

However, it is likely that an effort will be made to raise the $20 million ceiling.