Iowa City local option sales tax referendum to go on November ballot

IOWA CITY - Johnson County voters will be asked to vote on a request to increase the sales tax this November.

The Iowa City Council voted 7-0 to send a 1 percent local-option sales tax referendum to voters this fall during a meeting Monday afternoon.

The sales tax would generate an extra $9 million to $12 million a year for the city and comes after an Iowa City committee recommended the sales tax referendum be placed on the ballot.

The ballot item also comes at a time when some are concerned about losing revenue from state-enacted property tax reform and competition from neighboring cities with lower property tax rates.

If voters approve the referendum, the salse tax would rise from 6 percent to 7 percent.

By state law, cities that share a border must vote on the measure together. It also needs to get more than 50 percent of the total votes cast to pass.

For Iowa City, the voting block would include Coralville, North Liberty, University Heights and Tiffin.

The city administrators in Coralville and North Liberty said Monday neither of their city councils had talked about the sales tax yet.

The local-option sales tax referendum will appear on the Nov. 4 ballot alongside a $30.8 million bond referendum for a Johnson County courthouse project.

Citizens in Cedar Rapids and nearby cities approved a 10-year sales tax last November.