Cedar Rapids-area mayors seeking local-option sales tax extension, again

Voters turned sales tax extension down in May 2011, March 2012

Rick Smith
Published: July 16 2013 | 3:43 pm - Updated: 28 March 2014 | 5:50 pm in
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Don’t worry about a low voter turnout in November for city elections in the metro area.

Several metro mayors will hold a news conference at 10 a.m. Wednesday at City Hall in Cedar Rapids to announce that they will ask voters again in November to extend the 1-percent local-option sales tax to fix streets and city infrastructure.

Will the third time be the charm? Voters in the metro cities turned down a sales tax extension in May 2011 and March 2012.

Cedar Rapids Mayor Ron Corbett has been talking about extending the sales tax, which expires on June 30, 2014 after a 63-month run, for 10 years to fix streets in Cedar Rapids.

Revenue from the existing tax in Cedar Rapids, which will have raised about $90 million over the 63 months of the tax, has been used for the city’s flood recovery.

The metro area communities which border one another — Cedar Rapids, Marion, Hiawatha, Robins and Fairfax — vote as a block on sales-tax matters, and each community decides how it will use its share of the funds if the tax measure is approved by the block.

Robins Mayor Ian Cullis said he will be at Wednesday’s news conference to speak in favor of the sales-tax extension.

"I think the sales tax is one of the few things that is beneficial to all the small towns in the county," Cullis said. "And it benefits Robins if they have it.

"We spend all our money for goods and services in Cedar Rapids, and it’s fine if we get something back after making that investment."

The local-option sales tax in a county is collected and sent to the Iowa Department of Revenue and then distributed via a formula to jurisdictions in the county with the tax in place. The formula takes into account that most of the sales tax is raised in an urban center like Cedar Rapids, but some of the tax is paid by those in the county who live outside the urban center.

In the fiscal year that ended on June 30, 2012, the 1-percent tax brought in $17.4 million to Cedar Rapids; $4.46 million to Marion; $910,616 to Hiawatha; $366,154 to Robins; and $248,112 to Fairfax, according to the Iowa Department of Revenue.

In March 2009, the Iowa Legislature allowed the metro cities to vote as individual entities and not as a block because Cedar Rapids had a unique interest in raising money for flood recovery. Cedar Rapids and Fairfax easily approved the sales tax while Hiawatha, Robins and Marion turned it down. Two months later, Hiawatha, Robins and Marion — each wanting to get some money returned to them since their residents were paying the tax on sales in Cedar Rapids — voted again and approved the tax by large margins.

In May 2011, the block turned down a plan to extend the tax for 20 years. The measure failed by 221 votes out of more than 32,000 cast. Cedar Rapids wanted the funds for flood protection and streets.

In March 2012, the block turned a 10-year extension down, 51 to 49 percent.

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