Four Cedar Rapids-Metro Area Mayors Support Local Option Sales Tax Extension

By Rick Smith, Reporter

CEDAR RAPIDS, Iowa - Four metro area mayors who don't always see eye to eye spoke as one Wednesday to say they supported the extension of the current 1-percent local-option sales tax for 10 years to help their cities pay with infrastructure projects.

Voters will weigh in on the sales-tax extension at the Nov. 5 general election.

The current local-option sales tax, which has been in place since the spring of 2009, expires in the metro block of cities — Cedar Rapids, Marion, Hiawatha, Robins and Fairfax — on June 30, 2014.

Only the mayor of Fairfax was not at the Wednesday news conference at City Hall in Cedar Rapids.

"We stand here today, united, with one voice ...," Cedar Rapids Mayor Ron Corbett said. "There isn't a day that goes by citizens of our respective jurisdictions don't petition us with the issue of when are we going to fix the streets in our communities.

" ... We've been dealing with this issue of poor streets for many, many years. ... What's been elusive has been a solution. ... The solution to the problem is to keep the penny."

The mayors of the other four metro cities said their communities would use the revenue from the 10-year tax extension in somewhat different ways.

Corbett said Cedar Rapids will use 100 of the revenue from a tax extension for streets.

In the vote on Nov. 5, Cedar Rapids' actual ballot language will state that 100 percent of the revenue will be used "to pay for the costs of the maintenance, repair, construction and reconstruction of public streets."

At Wednesday's event, Hiawatha Mayor Tom Theis noted that Hiawatha has used 57 percent of the revenue from the existing sales tax for streets and has spread the rest of the revenue among city departments, including police, fire, water, parks, library and City Hall. He said he expected the city of Hiawatha to continue that approach if voters pass a tax extension.

"This is a great benefit for the city of Hiawatha, there's no question about it. I'm glad that the city of Cedar Rapids is pushing for this," Theis said.

Marion Mayor Snooks Bouska said Marion is looking to use about 70 percent of its revenue from the local-option sales tax for streets and 30 percent for other infrastructure projects, including a fire station, upgrades to parks and trails, uptown projects, and sewer and water management projects.

Without the sales tax, the city is left to take on debt and pay it off with revenue from increased property taxes if it wants to complete some of this infrastructure work, he said.

"This 1 percent is already in place. It's very easy to continue this," Bouska said.

Robins Mayor Ian Cullis said Robins' streets are in good shape, but the city has other infrastructure needs, including a share of the cost of a major metro area sanitary sewer project.

Cedar Rapids' Corbett said the cities were not proposing to raise taxes with the tax extension but to keep a current tax in place.

He said the city intended to see that it builds a flood protection system with the help of federal and state money, but the plan for now will be to use local funds other than sales tax revenue to meet future requirements for local matching money for flood protection, he said.

Cities in Iowa are faced with the prospect of losing revenue from property taxes after the Iowa Legislature this year reduced property-tax rates on commercial and industrial property and changed the definition of apartment buildings from higher-taxed commercial property to lower-taxed residential property.

Corbett said Cedar Rapids city leaders intended to lobby the Iowa Legislature in the upcoming years over the potential loss in revenue because of recently approved property-tax changes. Asking voters to extend the local-option sales tax was to fix streets, not to fill a hole in the city's budget that might result from the state's property-tax reform, he insisted.

At the same time, he anticipated that the city will stop taking on debt and paying it off with property-tax revenue if the sales-tax extension is approved by voters.

Cedar Rapids City Council member Kris Gulick, who is chairman of the council's Finance and Administrative Services Committee, said the city of Cedar Rapids could use at least $30 million to $35 million a year to fix its 630 miles of streets, 15 percent of which are in poor condition and 19 percent in fair condition, he reported.

He called it a "$300-million problem," and he said the city for years has averaged about $4.5 million of spending on street repair and reconstruction.

"You can see we're not making any headway," Gulick said.

Corbett noted that the local-option sales tax is a pay-as-you-go approach, which would provide revenue each year without having to take on debt for street projects. People who work, shop, eat and play in Cedar Rapids but live outside the city must pay the sales tax, too, which means everyone who uses the city streets helps to contribute to their upkeep, he said.

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.

State law requires cities in a metro area with touching borders to vote as a block on sales-tax measures. The total vote in the block of cities determines the vote outcome.

In May 2011 and in March 2012, voters in the metro block defeated referendums to extend the sales tax in close votes.
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