Flood victims take comfort: city and state say tax abatements won't count as 'duplication of benefits'

Flood victims in Cedar Rapids and Linn County who are now in line for an abatement of their property taxes don't need to worry that the money they save from the forgiveness of property taxes will be considered a so-called “duplication of benefits” which they will need to pay later.

That's the word from Jennifer Pratt, the city of Cedar Rapids' development coordinator.

Pratt contacted the Iowa Department of Economic Development on the matter on Tuesday morning when a resident raised the question. Pratt reported that the state agency quickly reported back that tax abatements don't count in any calculation of duplication of benefits.

The reasoning is that the tax abatement is not directly tied to home repairs or the purchase of a replacement house, Pratt explained.

The Linn County Board of Supervisors voted in September to offer tax abatements for the months in the taxing period of July 2008 through June 2009 in which owners lost the use of homes and businesses as a result of the June 2008 floods.

Federal and state agencies providing funding for home repairs and home buyouts insist checks are made to make sure that flood victims do not get similar federal or state benefits for the same thing. Thus, there is a check for duplication of benefits.

On Tuesday, Pratt said the city continues to work with the U.S. Department of Housing and Urban Development in a debate over whether down payment assistance paid from state Jumpstart funds to some flood victims for a new home should be subtracted from the eventual buyout price of their old home. Pratt noted that the Federal Emergency Management Agency allows up to $10,000 in additional money to cover the higher cost of a replacement home, and she said the city is trying to see if HUD will view down payment assistance using HUD's Community Development Block Grant money like FEMA's replacement housing cost.

Pratt said if all goes well, the city will be in a position in early November to make its first buyout offers of flood-damaged homes in the proposed “greenway” along the Cedar River. The first closings on those properties could come by Christmas, she said.