Property or sales taxes to repair Cedar Rapids streets?

During and after their first session of the city budget season, some council members here last night made it clear they have questions about a proposed budget that cuts city property-tax spending to fix streets and other basic infrastructure, a spending cut from $39 million in the current budget year to $19.6 million in the budget year that starts July 1.

The discussion about property-tax spending for streets isn't coming in a vacuum.

Just last week, Mayor Ron Corbett moved close to calling a special election, perhaps for May 3, to ask voters to extend the city's 1-percent local-option sales tax for 20 more years. Fifty percent of the sales-tax revenue would go to help fund a flood-protection system, 50 percent to fix streets. Using sales tax revenue to fix streets means the need for less revenue from property taxes to do the job.

Last night, though, council member Tom Podzimek wasn't thinking about any voter referendum that might come, but instead was quick to note that as recently as last year the city had projected that it would need to increase property-tax spending annually on streets and basic infrastructure if the city ever hoped to get ahead of problems with an aging infrastructure.

Podzimek said the budget proposed by City Manager Jeff Pomeranz and presented to the council last night guaranteed more and bigger potholes and more broken pipes in the city's water and wastewater systems. Pomeranz said the city's flood recovery required the city to spend more on city buildings, less on basic infrastructure.

After the meeting, council members Chuck Wieneke and Don Karr both had questions about spending to fix city streets.

The budget session gave council members little chance to ask questions of Pomeranz. His budget overview filled up most of the two-hour session.

The proposed budget raises the average homeowner's property tax by 7.84 percent while keeping taxes on commercial and industrial property as they are. Changed valuations for residential property and the state requirement that homeowners pay tax on a larger percentage of the value of their home resulted in higher residential property taxes, the city manager said.

After the meeting, both Karr and Wieneke took note of the word of caution that Pomeranz offered about the city's increasing need to issue debt for city building projects. Pomeranz's budget proposes to use cash reserves in the 2012 and 2013 budget years to help with debt payments, but he said there would be no such reserves in the 2014 budget year to cover the increasing cost of paying off debt.

City Council member Kris Gulick last night said he, too, wants to see how Pomeranz's capital-improvement budget fits in the longer-term view of the city's capital needs.

Gulick, though, noted that the city spent $31 million on streets and other basic infrastructure in fiscal year 2009, an amount which dropped to $19 million in fiscal year 2010 before jumping to $39 million in the current budget year. It's been up and down, he said.

Gulick said the city needed to invest in capital projects, whether streets, buildings like the Convention Complex or quality-of-life amenities, in such a way as to help increase the city's tax base.

“It's a balancing act, and you can't do it all at once,” he said.

The council holds its next budget session at 5 p.m. Thursday at the temporary city hall.