‘3 by 5’ tax hike proposed to stabilize Cedar Rapids library

CEDAR RAPIDS - Five months after voters rejected a special 27-cent tax levy for the public library system, Cedar Rapids officials are pitching what would eventually be a 15-cent tax increase that would skip a public referendum.

Their '3-by-5” tax plan would generate money specifically for the Cedar Rapids Public Library, which recently reduced hours and staff due to a $400,000 budget cut, by increasing the general property tax levy, which is approved by the City Council and not directly by voters.

Cedar Rapids Mayor Ron Corbett called the new plan a 'reasonable” and 'more modest” proposal that provides funding predictability needed to run one of the city's largest departments.

Last November saw a failed referendum for a tax levy of 27 cents per $1,000 of taxable assessed property value, which Corbett said sought too much money and erred by not including an expiration date.

'It's addressing the issue head on,” Corbett said. 'People support the library system. Going forward, we don't want to reduce library hours year after year after year.”

Corbett, City Council members Justin Shields and Ralph Russell and library Director Dara Schmidt unveiled their tax plan to The Gazette this week. The framework is a 3-cent increase to the general property tax levy per year for five years, beginning in fiscal 2018 and plateauing in 2022.

'This would hold the line for us,” Schmidt said. 'Without it, next year we would have to do additional cuts to hours and staff. With this plan, in five years, we may be able to restore some of the cut hours, although not to the extent before.”

The Cedar Rapids city tax rate is $15.22 per $1,000 of assessed value, and it has not been increased in eight years although tax bills include other levies and a variable rollback that can change the total collection from year to year. In the fiscal 2017 budget, the library is slated to receive 72 cents, or about 4.7 percent, of the tax rate.

When fully phased in after five years, the new tax would add 15 cents per $1,000 to property bills.

Each penny of tax increase generates about $55,000, Corbett said. In the first year, the tax would raise about $165,000 extra for the library, and about $825,000 a year after rate plan is phased in.

Schmidt said the library is facing a $200,000 shortfall heading into the next budget cycle due to inflation and salary increases, and this plan would sustain operations.

The 3-by-5 proposal would not go before voters.

Rather, city leaders would discuss it and take feedback, and ultimately the City Council would vote on the plan next spring.

The council would have the ability to re-evaluate the tax plan each year during budget planning, and a future council could decide to abandon it, Corbett said.

'It would not tie the hands of future councils,” Corbett said.

City spokeswoman Maria Johnson was asked but did not respond to questions about whether such a plan would face any regulatory obstacles.

Library expenses were cut from $6.3 million in fiscal 2016 to $5.9 million in 2017, although they are up from $5.4 million in 2015 and $4.5 million in 2013.

Budget pressures surfaced when the library added a full-service second location, the Ladd Library, to keep up with population growth and demand on the westside. Some have blamed the new downtown library, which opened around the same time as Ladd, for budget woes.

Critics say the plans were overly ambitious for rebuilding the downtown library post-flood, with a total project coming in at $46 million.

That was largely covered by federal flood recovery money, and city and library officials contend the cost increases are due to operating two libraries with heavy demand from the public.

The new tax plan would push off the need for another library levy referendum, which legally could be requested of voters again in 2017. But the group said it wouldn't rule out that such a question could go before voters again at some point if demand continues to grow.

The 2015 referendum was defeated 55 to 45 percent.

The Cedar Rapids library is cutting while its usage is among the top in the state, Reductions also come as a number of communities are expanding or making plans to expand facilities and offerings, including Marion, Hiawatha, Center Point, Waukon and Knoxville, as residents lean on libraries more for social gatherings, civic meetings and Internet access for job hunts or school work.

'When the cuts happened, I think there was an awakening of all of the things the library can do,” Shields said. 'It was a rude awakening that we really do need libraries. They are an integral part of our nation.”

Shields said the 3-by-5 tax plan would help, but the library still needs other sources of income.

Among the biggest cuts occurred on March 28 when the library reduced hours. The libraries now close an hour earlier - at 8 p.m. - on Mondays, Tuesdays, Wednesdays and Thursdays at both downtown and Ladd locations. Ladd is closed on Saturdays and the downtown library is closed on Sundays. Also, staff was reduced and cuts were made to the collection and improving technology.

Russell said the city is staring down relatively flat tax revenue growth in the years to come, and most departments will be looking at services and opportunities for efficiencies. He said the library has three openings on its oversight board of directors and it would be a good opportunity to bring on board fresh perspectives.

Applications for the board are due on April 30 and the term begins on July 1.

'We need good people involved,” Russell said. 'We need great candidates coming forward.”