Honor the intent of sales tax

By The Gazette Editorial Board

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Cedar Rapids Mayor Ron Corbett and the City Council are working hard to spend the local-option sales tax money that voters approved in March 2009 to assist their flood-stricken community. The spending decisions have weathered disputes with the oversight committee that recommends how LOST revenue should be used. And they've passed scrutiny by the state auditor.

Last week, the mayor and oversight group agreed that some of the LOST money could be used to rebuild flood-damaged city buildings. We also agree - as long as use doesn't go beyond vital public facilities.

Using LOST revenue for the local funding match for such projects as the new central fire station or the public library meets the intent of the LOST referendum language, which states, in part, that the tax can be used as “matching funds for federal flood dollars to assist with flood recovery or flood protection ...” Many city building projects will receive federal disaster funding. And using LOST revenue would reduce the need for bonding and taxpayer debt.

The mayor also is including the new Event Center project on his list of potential projects for which LOST money could be used. That's too much of a stretch.

The $67 million Event Center, to feature a new convention center next to an upgraded U.S. Cellular Center and Crowne Plaza Hotel, is an exciting project that we support. It's a major economic development driver; $50 million in state and federal grants are secured.

But it's not an essential flood-damaged public facility. It's not getting disaster funding. Using LOST dollars toward the $17 million of local funding needed doesn't meet the intent. Voters who approved LOST rightly expect the city to honor that intent.

LOST - projected to reach $80 million over its 63-month run - goes for property tax relief (10 percent), with the bulk to be used for “the acquisition and rehabilitation of flood-damaged housing” and other flood-recovery needs, as noted above.

After voters OK'd LOST, the city learned it would get substantial federal and state funds for buying out 1,300 homes and helping rehabilitate others. That freed up some LOST revenue. So this summer, the council adapted and decided to give flooded homeowners up to $10,000 each to replace lost possessions, less any federal or private insurance money received. Later, similar help of up to $4,000 for renters was added. As many as 3,700 people will get help.

The oversight committee questioned whether the program met the referendum's intent. The state auditor said it does.

Ensuring individual flood victims get help should remain a priority for LOST revenue. Using some of the money toward vital public facilities makes sense. But including the Event Center doesn't and could jeopardize voters' trust if the city decides to seek renewal of the sales tax when it expires.