Council set to vote on special election to extend local-option sales tax

The City Council on Tuesday will vote to hold a special election May 3 to extend the city's 1-percent local-option sales tax for 20 more years to help pay to build a flood-protection system and to fix city streets.

Six of nine council members, led by Mayor Ron Corbett, have said they supported asking voters for the sales-tax extension as a way to help ensure that the city can build its “preferred,” $375-million flood-protection system to protect both sides of the Cedar River.

The Army Corps of Engineers has recommended only a no-frills, $100-million system that leaves the city's west side unprotected from future flooding as well as parts of the river's east side.

Linn County Auditor Joel Miller said Friday that the Cedar Rapids council's call for a special election will prompt a countywide vote except in jurisdictions that choose not to participate. Ever jurisdiction in the county currently has the 1-percent tax in place, with Cedar Rapids' tax, 90 of which goes for disaster relief, set to expire June 30, 2014.

On Friday, Cedar Rapids council member Chuck Swore called the 20-year extension of the local-options sales tax “imperative.”

“We got to do this or we're going to find ourselves with a problem we can't solve,” Swore said of the city's flood-protection needs.

As it calls for a special election, the City Council also is currently working on its annual budget for the fiscal year that begins July 1 with a budget proposal in front of it that will raise the city's share of residential property taxes by 7.84 percent.

Swore on Friday said he will push the council to pass a new budget that does not increase property taxes so as not to provide “ammunition” for opponents of a May 3 special election to extend the city's local-option sales tax. Passing the sales-tax extension is too important to risk jeopardizing its passage with a property-tax hike, he said.

Corbett on Friday promised to be out in the community in the weeks and months leading up to a sales-tax vote to sell it to the public.

“This isn't about growing the size of government,” the mayor said. “I'm trying to fund the levee protection system for both sides of the river.”

The 20-year extension of the tax in Cedar Rapids would raise $360-million or more over the period at the current collection rate, with the idea that half of the amount would be used for street repair.

The city also is pushing a proposal at the Iowa Statehouse in hopes the state will agree to divert the growth in state sales tax collected in Cedar Rapids and Linn County for a number of years to also pay a portion of Cedar Rapids' flood-protection system. As now contemplated, the federal government would pay $65 million for the Corps' piece of the system.

Corbett said Friday that extending the local-option sales tax in Cedar Rapids should help the city secure Congressional and Statehouse funding.

Last week, Corbett used excess campaign funds to pay for his own scientific phone poll. The results showed that the majority of Cedar Rapids residents supported a flood-protection system for the city and supported extending the sales tax to help pay for it, the mayor reported.

The size of the majority increased, he reported, when respondents were asked if they would be more apt to support the tax extension if half of the money went to city street repair.

In the state law that regulates the local-option sales tax, cities in a metro area that share boundaries must vote in a block, with the success of the vote in any one of the contiguous cities dependent on the vote of the block.

The mayors of Marion, Hiawatha and Robins, which would be part of the Cedar Rapids metro block, all said last week they favored a vote on the tax extension and all said they had plenty of local projects that could use the sales-tax revenue over time.

A special piece of flood-recovery legislative in 2009 did not require the four communities to vote as one block when they put the local-option sales tax in place that year. Initially, Marion, Hiawatha and Robins voted the tax down, but then they quickly held another vote when they realized that money from the tax that would have come to them would go to Cedar Rapids and other jurisdictions in the county.

The Linn County Board of Supervisors formally calls the special election once the city of Cedar Rapids, with the majority of the county's population, asks for it. The board can decide a different time extension than the one requested by Cedar Rapids, Auditor Miller said Friday.

Miller estimated that it will cost $135,000 to conduct a special election, with Cedar Rapids responsible for about $80,000 of the cost and the county's other jurisdictions that vote paying the rest.