Self-imposed business tax passes its first reading

IOWA CITY - The Iowa City Council has given the first nod of approval to re-establish - and eventually increase - the self-imposed tax on downtown businesses.

The council voted unanimously - with Mayor Matt Hayek and council member Terry Dickens recusing because of conflicts of interest - to pass the first of three readings to renew the Self Supported Municipal Improvement District, or SSMID, ordinance for 10 years.

The SSMID, which provides revenue for the Iowa City Downtown District to use for events, marketing and special projects, was first approved four years ago and imposes a levy rate of $2 per $1,000 taxable value of properties within the district, excluding residential and tax-exempt properties.

'These are business owners and property owners who are voting to tax themselves for the betterment of the whole downtown area,” said Susan Mims, mayor pro tem.

If it passes the next two readings, the tax rate will stay unchanged until July 1, 2021. Then the maximum rate could go up 50 cents per $1,000 taxable value.

The new SSMID district will be slightly larger, including the south side of Burlington Street and more property east of Gilbert Street. The Downtown District board also will be expanded.

The ordinance applies to the majority of businesses and property owners in downtown and Northside Marketplace.

In its first four years, SSMID funds have helped the district add lighting to the Northside district, provide power washing services on more buildings, and invest in a community police officer.

If the final readings are condensed, SSMID could be approved before the year ends.