Des Moines’ mayor is asking the state, hospitals and other tax-exempt property owners in the city to make voluntary payments to help patch up its projected budget hole.
In letters addressed to the State of Iowa, local hospitals, and a university, Des Moines Mayor Connie Boesen asked entities to provide a payment in lieu of taxes (PILOT), voluntary payments to help cover the cost of services like public safety, road maintenance and snow and debris removal provided to nontaxable properties, as first reported by Axios.
Payment in place of taxes would allow the city to offset the costs of maintaining services for the tax-exempt properties, shifting a portion of the burden off of Des Moines taxpayers, Boesen wrote in a May 26 letter to Iowa Gov. Kim Reynolds, obtained by the Des Moines Register. Boesen addressed similar letters to MercyOne, UnityPoint Health, Broadlawns Medical Center, the Iowa Finance Authority, and the University of Iowa, which has the John and Mary Pappajohn Education Center downtown.
“I came up with it after we found out how much we’re going to have to cut again. I said, ‘It’s time,'” Boesen told the Register when asked about the letters. “We need help. We cannot keep cutting services in a community that we’re trying to rebuild.”
Broadlawns was the only entity that responded to the letter as of July 15, Boesen said. Hospital leaders said they were willing to learn more about the mayor’s request.
The city is facing an estimated $12 million budget deficit in fiscal year 2028, which begins on July 1, 2027, and an additional $5 million hole the following year. City Manager Scott Sanders attributes the deficit to a state property tax law revamp, which implements a 2% growth cap on local governments’ general fund levies.
The city’s general fund, which pays for all city operations and departments, is largely funded by property taxes.
The extra funds could mean not cutting as many essential services and amenities that residents want, Boesen said.
Meanwhile, about 40% of property in Des Moines is non-taxable, Sanders said during a public budget meeting July 9. This includes property owned by the state and non-taxable organizations such as nonprofits, churches and schools.
While it’s difficult to estimate the value of the city’s non-taxable property, Sanders said it’s also likely that about 40% of the city’s building values are not taxed, which equates to at least $30 million or more of potential loss each year.
“We see the need to lower our property tax rate to improve affordability for residents, businesses, and other community members who call Des Moines home,” Boesen wrote in the letter to the governor. “This goal becomes harder to achieve when the cost of doing business does not account for who is contributing to the same services our property taxpayers pay for.”
The city started using the voluntary payment program in the late 1990s, with Des Moines hospitals pledging to pay about $860,000 per year, according to Des Moines Register archives.
Some of the hospitals that were making payments to the city more recently have not paid the city in the last four or five years, Sanders said at the July 9 meeting.
In the last fiscal year, 2026, the city received $5,000 from the Community Foundation of Greater Des Moines; nearly $1.4 million from Des Moines Water Works; $700 from Hoyt Sherman Place; about $42,000 from Metro Waste Authority; nearly $1.3 million from the Water Reclamation Authority; and about $744,000 from the Des Moines Airport, according to city data.
As to how much entities typically pay, city officials typically start conversations with estimates of public safety costs, which vary by organization, Des Moines Finance Director Nick Schaul wrote in an email to the Register. But the organization can ultimately pay what it wants.
As a requirement of the new property tax law, lawmakers agreed to set up a task force that must present a report before the 2027 legislative session about how Polk County could obtain money from non-government tax-exempt parcels.
In her letter to the governor, Boesen asked for the city to have a representative on the task force.
Virginia Barreda is the Des Moines and Polk County government reporter for the Register. She can be reached at vbarreda@dmreg.com.
This article originally appeared on Des Moines Register: ‘We need help’: Des Moines mayor asks state, hospitals for payment
Reporting by Virginia Barreda, Des Moines Register / Des Moines Register
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By Virginia Barreda, Des Moines Register | USA TODAY Network
