Subcommittee gives preliminary approval to sales tax plan

Legislation calling for a cost-sharing approach toward flood protection and rebuilding efforts in Cedar Rapids and other communities won preliminary approval Monday.

Subcommittee approval of Senate File 2217, which would create a way for Cedar Rapids to keep a portion of future sales tax revenue for flood walls and other flood mitigation projects, came a day before Linn County residents go to the polls to vote on extending an existing local option sales tax for 10 years with all of the money going to “establish and maintain” a flood protection system on both sides of the Cedar River.

SF 2217 will be taken up by the full Appropriations Committee later today and possibly could be acted on by the House later this week.

The Senate already approved SF 2217 50-0.

“Which should be a red flag to us,” Rep. Chris Hagenow, R-Windsor Heights, joked.

Reps. Nick Wagner, R-Marion, and Pat Murphy, D-Dubuque, joined Hagenow in signing the bill.

The bill would establish a 10-year state flood mitigation program capped at $30 million annually in state sales tax revenue with a maximum award of up to $15 million a year for any qualifying single community to match local and federal funds that communities would spend on flood protection projects.

The legislation would let Cedar Rapids and other Linn County communities keep some of the sales tax revenue that would otherwise go to the state and use it locally to prevent future flood damage.

Among the concerns raised to the subcommittee was the additional work it would create for the Department of Revenue, according to spokesman Victoria Daniels.

She noted there are several proposals this legislative session that create sales tax carve-outs for communities.

“With our current staffing levels, it's going to be difficult at best,” she said. “At some point Legislature has to determine whether it's more important to administer these programs or to collect revenue.”