Cedar Rapids residents will cast their votes March 6 on extending Linn County’s one-percent local-option sales tax (LOST) to fund flood protection, but what’s in it for other county residents?
The current one-percent LOST brought in $31.9 million in the fiscal year that ended last June 30. Cedar Rapids’ share came to $19.1 million.
Voters in Alburnett, Center Point, Central City, Ely, Mount Vernon, Lisbon, Palo, Springville, and Walker can sleep in. Those cities’ voters approved the extension last year, so they’re not on the ballot this time. Coggon, Prairieburg, and Bertram have adopted the tax in perpetuity, so they’re not voting either.
The state Department of Revenue allocates revenues from the one-percent tax under a formula spelled out in the Iowa Code: 75 percent by population, the balance in proportion to each jurisdiction’s property tax levy between July 1, 1982 and June 30, 1985 (yes, it’s that long since the formula’s been updated, although it was modified for the March 2009 vote).
If the tax passes countywide but fails in an individual voting jurisdiction, that jurisdiction won’t receive the proceeds.
Fairfax, Marion, Hiawatha and Robins are in a single metro-area voting bloc with Cedar Rapids. Cities that do not pass the local-option sales tax in a metro bloc that, overall, adopts the tax may collect the tax but must use the money only for purposes stated in that city’s ballot language.
Outside of Cedar Rapids, Marion and rural Linn County have the most specific ballots.
Marion, which received just over $4 million in fiscal 2011, would earmark 70 percent of new LOST proceeds for street and sewer work, the balance for other community projects, a change from last year’s proposal (30 percent tax relief, 50percent streets/sewers, 20 percent other projects.
A $54.5 million spending plan adopted by the city council spells it out more specifically – right down to the city block for the first several years of the tax.
“We want people to know as specifically as we can,” said Marion City Manager Lon Pluckhahn. “It’s a transparency issue.”
It’s a planning document, but “it’s going to be pretty close to binding,” said Marion Mayor Allen “Snooks” Bouska.
The council will name a nine-member citizen committee to ensure spending follows the plan.
“They will go through any of the spending, all that money will be attributed to what we said it was going to be, and if it isn’t they will find it,” Bouska said.
The city plans a series of informational meetings on its LOST plans before March 6. Bouska said he’ll point out that LOST funds will enable Marion to pay cash for street and utilities work instead of issuing bonds, saving $7 million in interest costs and allowing 26 years’ worth of work to be done in 10.
Linn County supervisors approved a ballot for the county’s unincorporated area allocating half its share to the secondary road system and 25 percent each to property tax relief and conservation projects. Money for tax relief would be applied against the county’s rural levy, currently $3.71 per $1,000 assessed value.
Applied to the current levy, the formula would reduce the rate by $1.08 per $1,000.
Approved 51 percent-49 percent in 2009, the current LOST funded the county’s rural flood-recovery projects through March 2010. Since then, it’s gone to secondary road and bridge projects – $5.2 million worth last year, more than double the regular secondary road budget.
Passing the extension would mean rural roads are “heavily subsidized by Cedar Rapidians and others,” said Supervisor Brent Oleson, R-Marion. “If it doesn’t go through, the road budget for planned construction for the next 10 years will be cut in half, and they’ll still pay the tax if it passes in Cedar Rapids.”
Supervisor Linda Langston, D-Cedar Rapids, said that if rural voters vote down a levy that passes countywide, they’d still pay the sales tax but would receive no funds.
“And I might add that if metro area passes it is almost impossible to get a LOST on the ballot again for Linn County for 10 years,” Langston wrote in an email.
The extra money would mean rural roads would be paved and seal-coated sooner, and the county would stay ahead of its bridge-replacement schedule, County Engineer Steve Gannon said.
Deputy Conservation Director Dennis Goemaat said the department’s share, conservatively figured at about $1.2 million a year, would fund improvements in county parks.
“It’ll benefit anyone in the county,” Goematt said.
Hiawatha’s ballot is unchanged from last year’s: “any lawful purpose,” with up to 10 percent for property tax relief.
“If we use the LOST tax for a street instead of bonding for it, it is in fact property tax relief,” said Mayor Tom Theis.
Hiawatha gets just under $1 million a year from the current option tax. Theis said the city’s used it to buy a rescue unit for the fire department and an SUV for the police canine officer, and “we’ve done improvements in the parks, we’ve rebuilt a couple streets.”
The Fairfax ballot’s “any lawful purpose” ballot is also unchanged.
“(As) one of the fastest growing towns in Iowa we kind of leave it open like that,” said Mayor Jason Rabe. “That way we can kind of say, ‘hey, what part of town do we need to address?’ It keeps us more flexible.”
Fairfax, which received more than $226,000 in LOST funds over the most recent fiscal year, has used its share to repaint the city water tower, replace an old stretch of water main, buy a new snowplow, and build storage for road salt and sand.
“If it were to pass for the 10 years, we would probably count it more as a revenue stream,” said Rabe. Among the potential uses through 2015 could be a curb-and-gutter upgrade of the town’s oldest streets.