Johnson County wants sales tax money for courthouse project

IOWA CITY - Johnson County voters will be asked for money on two different ballot issues this fall, and some officials want one of those to help with the other.

The county's Board of Supervisors has asked area towns to consider putting money from a sales tax up for a vote toward a county courthouse expansion, which is also on the ballot.

'Basically, what I want this to avoid is residents voting for one and not the other,” said supervisors Chairman Terrence Neuzil. 'To help avoid that either/or, maybe there's an opportunity for residents to support both.”

In the Nov. 4 election, Johnson County is seeking a $30.8 million bond to fund a courthouse annex south of the existing courthouse, 417 S. Clinton St. in Iowa City. It is to include new courtrooms, technology upgrades, a connection to the courthouse and conference rooms to resolve space and safety concerns at the 113-year-old courthouse.

Also on the ballot is a countywide local-option sales tax measure, called for by Iowa City, that would increase the sales tax from 6 percent to 7 percent if approved.

The supervisors recently asked officials in Johnson County towns to approve ballot language to commit 10 percent of the sales tax proceeds to the courthouse bond.

Iowa City was able to require the sales tax vote because of its size, but communities decide for themselves how they would spend the sales tax revenue they receive.

Iowa City has already said it would put 50 percent of revenues toward property tax relief, 40 percent to street improvements and 10 percent to affordable housing.

However, Mayor Matt Hayek sent Neuzil a letter this week saying his City Council would be willing to discuss it as long as towns Iowa City shares a border with and the county are willing to do the same. By law, Iowa City Coralville, North Liberty, University Heights and Tiffin must vote together on the sales tax and the combined votes in favor would have to surpass 50 percent for it to pass.

'We don't know all of the details yet, but ... Iowa City is open to the request,” Hayek said in an interview.

To be determined is how Iowa City would adjust the percentages of what it would use the tax money on, but Hayek said the initial idea is to reduce the property tax relief portion to 40 percent.

Coralville and North Liberty will discuss the sales tax at upcoming meetings. Johnson County itself has not set ballot language for the unincorporated area, and there is some disagreement among the supervisors on how to use the money.

Coralville Mayor John Lundell said he supports the courthouse project and would be fine with 10 percent of the sales tax revenue going toward it. But he worries having the courthouse mentioned on two separate ballot questions would confuse some voters.

Coralville will discuss the sales tax Aug. 12.

'My instinct, speaking on behalf of myself, is to keep it clean and just let the courthouse project stand on its own,” said Lundell, who is not part of the City Council.

Neuzil said that could be avoided with a good public-education campaign and precise ballot language that says the 10 percent is contingent on the sales tax measure passing.

North Liberty plans to discuss the issue next week, Mayor Gerry Kuhl said. He did not want to comment on the county's request before that meeting.

The county, in rough estimates, says up to $17 million a year would be generated by the extra 1 percent sales tax if all towns and the unincorporated area pass it.

If they all dedicated 10 percent of their shares to the courthouse, that would be $1.7 million a year. The county estimates the yearly payment on the courthouse bond will be about $2.5 million.

The county would tax for the balance, meaning with the sales tax money, the county would be able to reduce what it taxes property owners to make those debt payments.

Neuzil noted that shoppers from outside Johnson County pay sales tax.

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