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Campaign promotes local options sales tax

BY ALEKSANDRA VUJICIC | SEPTEMBER 30, 2014 5:00 AM

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A local campaign is getting the word out about a local-option sales tax that will be on the ballot on Nov. 4.

The Yes Campaign has kick-started a website and Facebook page to inform locals about a possible 1 percent sales tax increase that Iowa City and neighboring towns in Johnson County may adopt, pending the outcome of the vote.

The money generated from the increase would give cities an additional source of revenue, separate from property taxes and water and sewer fees.

Mayor pro tem of Iowa City Susan Mims said the city has not been getting as much money from property taxes because of state legislation passed in 2013, and this tax increase would help the city fill in the gap.

Iowa City Finance Director Dennis Bockenstedt said that depending on which jurisdictions of Johnson County adopted the measure, it could bring in an additional $9 million to $14 million.

The City Council voted to put the proposal on the ballot over the summer.

“Through our evaluations, we determined that it should be pursued and that it was feasible,” Bockenstedt said.

In Iowa City, 50 percent of the sales tax would go toward street improvements and roadway maintenance, 40 percent would go toward property-tax relief, and 10 percent would go toward affordable housing, Bockenstedt said.

A similar tax increase was put into place from 2009-13 for flood-protection improvements, he said.

Johnson County Board Supervisor Rod Sullivan said if the proposal is passed, the tax would be put in place for 10 years.

Individually, he said, he’s against the proposal.

“I think it’s just the burden to the poor folks in our community, away from the folks who are more able to pay,” he said.

Mims said most cities in Iowa have a local option sales tax, and a lot of people may support it if they knew more about how the money would be spent.

Assuming the five area cities, including Iowa City, Coralville, North Liberty, Tiffin, and University Heights pass it, Mims said it’s very important that other cities in the county pass it or they won’t receive a share of the revenues collected, while simultaneously having to pay more when they shop in Iowa City or Coralville.

Groceries, medical supplies and services, automobiles, utility fees in Iowa City, along with rent and mortgage would not be taxed extra, she said.

“When you look at low-income people, the bulk of their expenses for their basic needs are not subject to the extra one percent,” Mims said.

A lot of people who do not reside in the county come here and spend money that would, in turn, help generate some of that sales tax that would be reinvested in the community, she said.

“You always have people that just don’t want any additional tax, but I think once they start understanding the impact of property-tax reform and how limited our revenue sources are, it makes sense,” she said.


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