Getting local-option sales tax revenue to renters likely to be complicated

Using some of city's local-option sales tax (LOST) revenue to pay tenants who lost personal items in the June 2008 flood won't be an easy task to accomplish, members of the city's Local-Option Sales Tax Oversight Committee.

The committee was responding at its recent meeting to a proposal by some on the City Council who in recent weeks said they wanted to create a payment program for renters much like one the council created that is now paying homeowners with LOST funds who lost personal possessions in the 2008 flood.

Gary Ficken, the committee's chairman, noted that there were three general groups hit by the flood in the city's residential neighborhoods – homeowners, renters and landlords.

Extending the LOST program to renters for lost personal items still leaves landlords out, he says.

City Council member Chuck Wieneke, who is the council liaison to the committee and attended the recent committee meeting, agreed that landlords easily could have lost more in personal possessions in the flooding of their rental properties than the tenants living in them.

Wieneke said some renters lived in furnished apartments, and committee member Lisa Kuzela noted that some renters lived on second floors and lost little in the flood.

Ajai Dittmar, a committee member and a flood victim, said she was a renter at the time of the flood and lost plenty of personal items.

Of note: The oversight committee in recent weeks concluded that it doesn't believe the referendum ballot language in March 2009, which put the one-percent LOST in place through June 2014, allows the council to use LOST revenue to make payments for personal possessions, even for homeowners.

The committee is a recommending body, though, and the City Council does not see it the way the committee does.

The ballot language calls for LOST revenue used for flood recovery to be used for property acquisition and rehabilitation and as “matching funds for federal dollars to assist with flood recovery.”

The committee's majority is of the opinion that the federal dollars that are matching the LOST funds for personal possessions is a match for federal dollars that that already have been spent. They are not LOST dollars needed to secure future federal dollars, which the committee says is what the ballot language intended.

Council member Wieneke noted that many renters got no federal funds soon after the flood and so, for many of them, there won't be a match for past federal funds given them.

The city estimates that the LOST tax will raise about $80 million for flood recovery.

As the City Council contemplates new spending for flood-affected renters, oversight committee member Elizabeth Hladky noted that one permitted use of the LOST pot of money will be as matching funds for federal money the city hopes to get for a new system of levees and flood walls. Such federal money typically comes with a local-match requirement of 35 percent.

It was unclear how much of the $80-million pot might be left for the flood-protection system.

To date, the city has spent $4.4 million in LOST funds for the personal possessions program, with checks averaging about $8,500 each. Some 1,600 people have applied for the funds, which can be as much as $10,000 for each household. Prior federal payments and any private-insurance payments are deducted from the $10,000. Little documentation is needed to qualify other than the past receipt of disaster money from the Federal Emergency Management Agency.

Only about $500,000 in LOST funds have been spent to date other than for the personal possessions program.