Des Moines Faces Budget Cuts Amid Property Tax Uncertainty

City leaders warn of layoffs and strategic planning as they brace for potential state reforms.

Published on Feb. 23, 2026

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Des Moines city leaders have outlined a budget proposal for the upcoming fiscal year that includes more than $255 million in general fund spending, a nearly $18 million decrease from two years ago. The proposal eliminates 16 city positions, with three employees facing layoffs. City officials say ongoing changes to Iowa's property tax structure have made long-term financial planning increasingly unpredictable, leading to a cycle of 'good-year, bad-year' budgets. With lawmakers at the Iowa Capitol considering sweeping property tax reforms, Des Moines leaders say they have little clarity on what changes are coming, but they know 'it's bad'.

Why it matters

Des Moines' budget challenges reflect the broader uncertainty facing cities across Iowa as state leaders consider major property tax reforms. The city's reliance on property tax revenue makes it particularly vulnerable to changes in the tax structure, forcing difficult decisions around staffing and services. This story highlights the tension between state and local control over budgeting and the potential impact on communities.

The details

The proposed budget eliminates 16 city positions, with most of those jobs currently vacant. However, three employees will be laid off, with one potentially able to transfer to another open role, but two likely unable to do so. City Manager Scott Sanders attributed the need for cuts to ongoing changes in Iowa's property tax structure, which have made long-term financial planning increasingly unpredictable. He described a 'cycle of budgets that are good-year, bad-year rotations' driven largely by when new property valuations take effect.

  • The proposed budget is for Fiscal Year 2027, which begins on July 1, 2026.
  • Des Moines must approve its budget by April 30, the statewide deadline.
  • City leaders said they expect to begin discussing the following year's budget almost immediately once state lawmakers finalize property tax reforms.

The players

Scott Sanders

The Des Moines City Manager who outlined the budget proposal and described the challenges posed by unpredictable property tax changes.

Josh Mandelbaum

A Des Moines City Council member who said the city has 'little clarity' on what property tax reforms are coming, but knows 'it's bad'.

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What they’re saying

“We found ourselves strategically looking at a cycle of budgets that are good-year, bad-year rotations.”

— Scott Sanders, Des Moines City Manager (weareiowa.com)

“We don't know exactly what it's gonna be, but we know it's bad.”

— Josh Mandelbaum, Des Moines City Council member (weareiowa.com)

What’s next

City leaders said they expect to begin discussing the following year's budget almost immediately once state lawmakers finalize property tax reforms.

The takeaway

Des Moines' budget challenges underscore the broader uncertainty facing cities across Iowa as state leaders consider major property tax reforms. The city's reliance on property tax revenue makes it particularly vulnerable to changes in the tax structure, forcing difficult decisions around staffing and services and highlighting the tension between state and local control over budgeting.