Questioning the Sales Tax Issue

There are some folks who oppose taxes (see Ax the Tax) because they don't believe the government has a place for anything other than public safety. There are people who believe that some taxes are needed to perform the tasks that the private sector does not do or is unwilling to do. There are people who oppose sales taxes because they are inherently unfair to the poor and those who oppose property taxes because they are unfair to landowners. The one thing that eveyone can agree on is that taxes are not well-loved.

This brings me to the Local option Sales Tax referendum that will require 50% + 1 of us to vote for it to allow a 4 year 1 cent sales tax to be imposed to allow Iowa City to upgrade Dubuque St. and replacing the bridge on Park Rd. (estimated cost $32 million)and relocating the north water treatment plant (estimated cost $63 million). We are told via the Iowa City website that the money will be earmarked specifically for:

"Improvements that will help the city maintain vital transportation, emergency, and public health services in both routine and emergency situations.

The ballot language for Iowa City states:

0% of the revenues generated by this tax will be used for property tax relief and the remaining for the following specific purposes: 100% for remediation, repair and protection of flood impacted public infrastructure and local matching funds for dollars received from any federal or state programs to assist with flood remediation, repair and protection of flood impacted public infrastructure."

The estimated income over the 4 years is $36 million which means there will be a deficit of $59 million created by these projects. This means that barring huge federal grants, water bills and other fees can be expected to increase or other services will be cut to accomplish these goals.

The key questions to taxpayers should be, are these projects necessary and, if so, are there alternatives to the proposals to accomplish the desired outcomes?

Complicating the matter is that the amount of funding is up in the air due to the rules that the state legislature has made. If voters in Iowa City vote down the tax hike, Iowa City will not benefit at all from taxes collected elsewhere in the county, nor will other cities receive tax revenues for sales taxes collected in Iowa City. Given that Iowa City is the largest municipality in the county, the benefits to smaller communities lessen if Iowa City doesn't play ball. Similarly, if Iowa City votes "yes" and other communities vote "no", there is less of a pot of money for Iowa City.

There are two scheduled fora in the next two weeks. One will be this Wednesday April 8th at Coralville City Hall from 7 to 9 pm. Speakers will be the city managers and planners from Iowa City, Coralville, and North Liberty.

For a more independently run forum, the League of Women Voters also is sponsoring an informational night Thursday April 16th at the Iowa City Public Library at 7pm. Tom Slockett will spend 10 minutes describing the law and how it works. Each city and the county will describe their ballot and what the money would be used for. The Pro and Con representatives will have 5 minutes to state their cases and there will be 30 minutes of written questions. Committed Mayors are from Iowa City, Coralville, University Heights, Shueyville, Oxford, and a representative from the Board of Supervisors.