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Tuesday PM Daily | February 26, 2019
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Cities are on their own, finally, for local option sales tax vote on March 5
Des Moines resident Mel Pins is an infrastructure kind of guy who would like to see streets get paved when they need it — pothole repairs last about as long as it takes to patch the hole, he says — and storm sewers flow free and easy and clear of neighborhood basements.
Look no farther than revenues is the answer Pins says he often hears from city officials. His ear is closer than most. Pins also is president of the Somerset Neighborhood Association and he chairs the city’s zoning board of adjustment.
On March 6, 2018, county voters took the revenue issue out the hands of the city of Des Moines when they rejected by 227 votes an issue that would have added 1 cent to the state’s 6-cents-on-the-dollar sales tax. It should be noted here that an estimated 97 percent of the state’s residents pay that 7 cents on their purchases, just not in Polk County.
All of that could change March 5, when voters in Des Moines, Alleman, Altoona, Pleasant Hill, West Des Moines and Windsor Heights will vote on the only issue on the ballot: Public Measure A, which would raise the sales tax to 7 cents on the dollar from 6 cents.
That city-by-city vote arrived courtesy of an 11th-hour decision by the
Iowa General Assembly last year to "decouple" cities with contiguous borders from voting on the local option sales tax. The Legislature acted after the Polk County vote failed.
Pins is part of a team that is advocating for passage of the tax. He joined Brad Anderson, state director of AARP Iowa, and Gretchen Tegeler, president of the Taxpayers Association of Central Iowa, to make a pitch about the benefits of the tax to the Business Record.
Anderson said this is the first time in its history that AARP Iowa has come out in support of a ballot issue. In this case, it is a question of safety — safe streets, welcoming parks, speedier response times by first responders — that turned the switch.
Tegeler, possibly Greater Des Moines’ leading and most respected advocate of responsible government spending — she does the research to bolster the organization’s positions — pointed out that in Des Moines passage of the local option sales tax
would take a big bite, nearly 20 percent, out of the city’s revenue burden.
"All the studies show that over-reliance on property taxes is an impediment to economic growth," Tegeler said. Des Moines has the highest property tax rate in the metro. If the sales tax measure is approved, city leaders will cut the property tax levy by 60 cents per $1,000. That includes erasing the 20-cent increase approved last year after the local option sales tax failed the countywide vote.
Des Moines struggles on the revenue side for several reasons. A study last year by a Virginia consultant found that property values lag most other Greater Des Moines communities. As the central city, its services are used by many people who don’t pay for them. That means the city struggles to repair roads and bridges and provide other services its residents expect.
Studies by the Taxpayers Association of Central Iowa and Iowa State University have shown that 30 percent of
revenues from the sales tax increase — $37 million for Des Moines alone — will be paid by folks who live outside of Polk County.
In addition, the tax will not be levied on essential items. Groceries, utilities, automobile fuel, vehicle purchases and prescription drugs are all exempted, for example. The tax is essentially on discretionary spending. The local option sales tax would not be added to the hotel/motel tax.
When lawmakers dropped the requirement that cities with common borders vote as a block, it also required that 50 percent of the additional revenues go toward property tax relief.
Here is a rundown on how most of the communities plan to use the extra revenue if the sales tax is approved:
In Altoona, where voters turned down the local option sales tax in last year’s vote, city officials estimate that the owner of a $175,000 home will save $87.67 a year in property taxes, while the owner of a $300,000 home will save
$141.73. Sales tax revenues will provide funding for road improvements, a new civic service center and training and facilities for the police department. It is estimated that 57 percent of retail spending in Altoona comes from nonresidents.
In Pleasant Hill, where voters also turned down the tax in March 2018, plans are to use 85 percent of an estimated $1.4 million in additional revenues for property tax relief, with the balance going toward projects that would stabilize property taxes. Pleasant Hill's property tax rate has held steady for 19 years at $11.65 per $1,000 of a home's assessed value. The rate would need to increase to approximately $13.54 per $1,000 to fund necessary public safety improvements if the tax fails.
West Des Moines could cut 79 cents from the current levy of $11.79 per $1,000 of taxable valuation. After residents on the Dallas County side of West Des Moines approved a local option sales tax in 2016, the city lowered the
property tax rate to $11.79 from $12. The city could receive an estimated $7 million from the local option sales tax.
In Windsor Heights, the city could slash its levy by 69 cents beginning with the fiscal 2021 budget year, based on estimated additional revenue of $850,000.
Des Moines could receive an estimated $37 million in extra sales tax revenue. If the local option sales tax is approved, city leaders will cut the property tax levy by 60 cents per $1,000. If the tax fails, the city plans to add 30 cents per $1,000 to its property tax levy and City Manager Scott Sanders has said property taxes could go up another $1.50 over several years.
All of the cities plan a range of public safety and infrastructure improvements with the remaining revenues. If approved, the tax would be effective July 1.
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NEWS BRIEFS
Kurovski to lead political exchange to Philippines, Indonesia
Pleasant Hill Mayor Sara Kurovski will lead an international political exchange to the Philippines and Indonesia on March 13-28 organized by the American Council of Young
Political Leaders (ACYPL), according to a release. The bipartisan delegation of eight emerging political and policy leaders between the ages of 25 and 40 from across the United States will explore the politics, governance and policymaking in the Philippines and Indonesia. The exchange will be organized by ACYPL in partnership with the National Movement of Young Legislators and the United States-Indonesia Society. It is funded by a grant from the U.S. Department of State Bureau of Educational and Cultural Affairs. Kurovski was a member of a delegation that traveled to Israel and the Palestinian Territories in 2016. Other notable ACYPL alumni from Iowa include Gov. Kim Reynolds (Taiwan 1995), Iowa Secretary of State Paul Pate (Chile and Brazil 1994) and Iowa Treasurer Michael Fitzgerald (China 1988).
Trump plans a big whack at USDA budget
Successful Farming: The U.S. Agriculture Department faces large spending cuts, Agriculture Secretary Sonny Perdue said, and a White House official said President Donald Trump will ask for "one of the largest spending reductions
in history" in the upcoming fiscal 2020 budget. Perdue told reporters that he encouraged the administration to submit a package "within the realm of negotiation," considering Congress rejected outright Trump’s previous budgets.
Noonan to headline ABI conference in Ames
Pulitzer Prize-winning Wall Street Journal columnist Peggy Noonan will headline the Iowa Association of Business and Industry’s Taking Care of Business Conference June 4-6 in Ames. The conference is expected to draw 1,000 business leaders to venues including Hilton Coliseum and the Sukup End Zone Club at Jack Trice Stadium. Noonan’s column, "Declarations," has run since 2000. She is also the best-selling author of nine books on American politics, history and culture. Also appearing will be former NBA and Iowa State basketball player player Paul Shirley and Rowena Crosbie, author, speaker and trainer.
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Guest opinion: Now is the time to build community
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BY JANN FREED: What is the leading cause of death?
A. High blood pressure
B. Inactivity (little to no exercise)
C. Social isolation
D. High cholesterol
E. Alcohol
F. Obesity
If you answered C, you are correct. Vivek Murthy, the U.S. surgeon general from 2014 to 2017, wrote a report that social isolation or loneliness is a more serious health problem than opiates. "Loneliness and weak social connections are associated with a reduction in lifespan similar to that caused by smoking 15 cigarettes a day and even greater than that associated with obesity."
It is connected, he wrote, "with a greater risk of cardiovascular disease, dementia, depression and anxiety." We live and work in the most technologically connected age in the history of civilization, but the rates of loneliness have doubled since the 1980s. Today, more than 40 percent of adults in America report feeling lonely, and the actual number may be even higher. Research has found that the number of Americans with "no friends" has tripled since 1985. Read more
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NEWS BRIEFS
Insurer UFG weathers a tough fourth quarter amid rising claims
Corridor Business Journal: It was a tough fourth quarter for UFG Insurance, bringing a consolidated net loss amid rising auto and property claims as well as investment losses. The Cedar Rapids-based insurer last week reported a fourth-quarter loss of $29.3 million, or $1.17 per diluted share, compared with a profit of $46 million, or $1.81 per share, in the same quarter in 2017. Consolidated net income for the full year ended Dec. 31, 2018, was $27.7 million, or $1.08 per diluted share, compared with $51 million, or $1.99 per share, in 2017.
Fiat Chrysler to invest $4.5B in Michigan for new Jeep models, will cut jobs in Illinois
Reuters: Fiat Chrysler Automobiles NV said today that it will invest $4.5 billion in five plants to build new models of Jeeps, creating 6,500 jobs in Michigan. At the same time, the automaker said it was cutting the third shift at its Rockford, Ill., plant, where it assembles the Jeep Cherokee, laying off 1,371 workers.
May offers a vote on delaying Brexit, expanding options as EU deadline looms
Iowa Public Radio: U.K. Prime Minister Theresa May says she's open to the possibility of delaying Britain's exit from the European Union that's planned for March 29, publicly accepting that option for the first time as she promised lawmakers a chance to vote on the
question.
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ONE GOOD READ
Iowa Nice on display BY CHRIS CONETZKEY: When Christopher Cadelago, a native of California and a reporter on the caucus trail for Politico, ran into a snowdrift during this past weekend’s blizzard, he also slid right into some good old-fashioned Iowa Nice that garnered the state some positive national press. Buckingham residents Janet and Mike Shock took in the stranded Cadelago for the day while he waited for the roads to clear. After 12 hours, a brief marital dispute about what type of sandwich (cheese or peanut butter) to pair with chili, some political talk and some tweets about the experience that got some attention, Cadelago, at the urging of the family, wrote about his experience. Here’s the end to the piece: "Janet was
preparing a supper of goulash and corn when the Oscars came on. I told her about the tweets, and she urged me to write something about it. 'I want people to know that there are good people in the world that would take a stranger in,' she said. 'We’re all people. We’re all human beings. God put us on this earth for a reason. We should all take care of each other.' Before pulling out of their driveway at about 9 p.m., I told her it wasn’t my thing to write about myself. So she suggested we make it about her state. 'I want people to understand,' she said, 'what Iowa is all about.' " Read the full piece
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KCCI TOP STORIES
Move it or lose it! Downtown parking will be banned for snow removal
For the first time in nearly a decade, the city of Des Moines will clear excess snow from downtown. But they need your help. All vehicles must be moved from downtown streets by 5 p.m. Crews will be clearing the piles of snow between the street and sidewalks. There will be a massive snow and ice removal effort by the city tonight. Any car that's parked on the street past 5 p.m. will be ticketed and towed. Read more
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Tonight:
Cloudy skies. Low 11. Winds N at 10 to 15 mph.
Wednesday:
Mostly cloudy skies. High 14. Winds NNW at 10 to 20 mph.
Get the latest KCCI weather.
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BUSINESS RECORD IOWA INDEXThe Iowa Index is an unweighted average of all 21 Iowa-based public companies. Below is a live look at those 21, plus 16 additional companies with large operations in Iowa.
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