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Editorial: Vote for local-option sales tax

BY DI EDITORIAL BOARD | JULY 03, 2014 5:00 AM

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Johnson County voters will have another decision to make this election season. As reported in The Daily Iowan earlier this week, the Iowa City City Council voted 7-0 to include the option for voters to approve or shoot down a local-option sales tax. The 1 percent increase, up from the current rate of 6 percent, would be distributed via a 50-40-10 model, funding property-tax relief, street and trail maintenance, and affordable housing, respectively.

The Daily Iowan Editorial Board views the 1 percent increase as a logical and relatively painless way to fund crucial projects for the Iowa City area. The proposed model effectively addresses local concerns.

Historically speaking, this approach has raised millions of dollars for flood-prevention projects, with an increase in sales taxes raising $34 million for the Gateway Project on Dubuque Street and the relocation of the North Wastewater Treatment operations to the South Wastewater Treatment Plant in 2009. That local-option sales tax expired in the summer of 2013. 

Similar to the infrastructure-focused efforts of the previous increase, 40 percent of revenue gained through the new plan would provide much needed funding to improve roads and trails in Johnson County. The American Society of Civil Engineers has reported that U.S. infrastructure, including roads and bridges, has been deteriorating for years, and Iowa is no exception. According to the organization’s 2013 report card, 46 percent of Iowa’s roads are in “poor or mediocre” condition, and the state has 5,193 “structurally deficient” bridges.

Making matters worse, the Iowa Department of Transportation has been chronically underfunded to the point of facing a deficit of $215 million. While the department has been doing its best to run with such limited funds, asphalt isn’t free. In order to fix our crumbling roads, money must be spent, and the proposed local-option sales tax would help fill the void the department’s lack of funding has created in Johnson County.

Property-tax relief and incentives encouraging the introduction of affordable housing are equally useful components of the proposed local-option sales tax. Allocating 50 percent of the generated funding to reducing property taxes and 10 percent to affordable housing will benefit homeowners and renters alike.

The cost of renting in Iowa City is substantially higher than Iowa’s state average. The average renter in Iowa must earn $13.26 per hour to afford a two-bedroom rental unit. In Iowa City, this number jumps to $16.37, according to a March report by the National Low Income Housing Coalition.

Considering that around 80 percent of UI students live in rental units, as the DI has previously reported, property-tax relief could slow the rise in cost for both property owners and renters, taking some of the strain off financially drowning students. Affordable housing will also help some of Iowa City’s struggling residents find places to live.

Voters in the Iowa City area will have the opportunity to improve the quality of life for city residents and those of surrounding communities. For most college students, the increased sales tax would pose a very minimal financial burden relative to the potential benefits of the proposal, which include better, well-maintained roads and perhaps stalling the rising cost of living in the Iowa City area. A local-option sales tax did wonders to raise money for local infrastructure projects in the past, and it can do it again.


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