Cedar Rapids Considers Local Option Sales Tax

By Mark Geary, Reporter

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By Mark Geary

Story Created: Dec 3, 2008 at 10:16 PM CST

Story Updated: Dec 3, 2008 at 11:22 PM CST

CEDAR RAPIDS – Some Cedar Rapids city council members say they’re tired of waiting for federal and state funds to help the city rebuild.

"We have a city we have to save,” council member Justin Shields said.

So now, the council wants to talk about creating a two-cent local option sales tax for the Linn County area. The money would go toward flood recovery.

Six out of the seven council members at Wednesday night's meeting said they want to talk about adding this new sales tax.

Usually this kind of a proposal would require voter approval, but some council members want to bypass that step.

"We can't wait anymore and just hope the money is coming. We need help immediately,” Shields said.

Council member Chuck Wieneke said, "Our own governor won't call a special session when we've had the greatest disaster that ever hit this state. Instead, we have to just sit and wait for seven months."

Some council members want state lawmakers to allow them to create this new county-wide tax without voter approval to speed up the process.

"A lot of times these things get really divisive. It's just a much cleaner way if the state would grant us that right because of this disaster,” Shields said.

Wieneke said, "If we don't find alternate means of funding to help us recover from this, if we don't find it, it's property taxes."

Critics may fear the tax would pay for other city and county projects, but that's not the council's intention.

"It's not a method to try to get tax money in for other purposes. It's to deal with this disaster because it's not being taken care of any other way,” Shields said.

Raising taxes is rarely a popular idea. In this case, the majority of council members seem to be saying they've run out of other options.

Mayor Kay Halloran said she's talked to other Linn County mayors about this idea recently.

Next week, the council will have a more formal discussion about creating a local option sales tax.

The city hasn't released any figures about how much revenue a new local option sales tax could generate.

However, the one year, one percent tax Cedar Rapids collected in 2002 to renovate city swimming pools brought in more than 15 million dollars. So, a two percent local tax might generate as much as 30 million in one year.

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