Voters could vote on local-option sales tax again soon

Officials will take a closer look at why LOST failed in Iowa City, Coralville, North Liberty

The bridge that crosses the Iowa River on Highway 965 is high on the list of many bridges that need repairs in Johnson C
The bridge that crosses the Iowa River on Highway 965 is high on the list of many bridges that need repairs in Johnson County, in North Liberty on Wednesday, October 29, 2014. If the LOST vote is approved in the county, the bridge will likely be repaired due to the its deck cracking significantly. (Sy Bean/The Gazette)

IOWA CITY — One day after the 1 cent, 10-year local-option sales tax failed to pass, some area officials say voters could be weighing in on the tax again in the near future.

While members of the Iowa City Council say it's likely the local-option sales tax (LOST) will come before voters again, the approach might be a little different, Council member Jim Throgmorton said.

“I think we will probably need to bring it back, but we will need to bring it back differently,” he said, noting that more communication with other Johnson County officials could help drum up regional support. “I believe we need to consult and negotiate with our neighbors before we bring it back.”

Throgmorton said increased communication with the public would also help raise voter support.

“Personally I believe very strongly that before we put it on the ballot, we need to go out into the precincts of Iowa City and consult with residents and seek their advice on how they think their money should be spent.”

Council member Kingsley Botchway also stressed the importance of examining the failed LOST before rushing into a second vote.

“I think we have to take a hard look at why it failed overall and if necessary bring something back to the voters that more people will support,” he said in an email.

There is no restriction on when a LOST item could come before voters again.

Voters in the contiguous city block — Iowa City, Coralville, North Liberty, Tiffin and University Heights — nixed the LOST with 54 percent — 19,374 votes — of voters opposed to the tax. The tax had to pass or fail as a whole in the five cities.

That said, a closer look at precinct results show that the LOST would have failed in Coralville and North Liberty, but would have narrowly passed in Iowa City.

A slight majority of Iowa City voters -- 50.4 percent -- approved the tax in the city's 24 precincts, while Coralville and North Liberty voters offered substantially less support, with 37.9 percent and 38.7 percent, respectively.

The LOST also failed to pass in unincorporated Johnson County, Oxford and Shueyville.

Voters in Solon, Swisher, West Branch, Hills and Lone Tree passed the LOST, with the closest margin in Swisher, where the tax passed with 55 percent of the votes, according to the Johnson County Auditor's Office.

If passed in all jurisdictions, the LOST would have generated an estimated $20 million in annual revenue, but with more than 97 percent of projected LOST revenue — which uses the state's LOST formula and is based 75 percent on the most recent census data and 25 percent on property tax levies from 1983 to 1985 — generated in Iowa City, Coralville and North Liberty, those communities where the LOST passed will see a meager amount in annual LOST funds.

Facing an estimated $51.7 million in reduced property tax revenue coupled with only about $14.7 million in state backfill over the next 10 years, 40 percent of the LOST was meant to soften the blow in lost property tax revenue following recent state rollbacks.

Iowa City Finance Director Dennis Bockenstedt said the lost revenue will likely be filled in two ways.

“It's either looking for alternative revenue or service cuts,” he said. “I think the idea was the sales tax would diversity the city's revenue, which would mitigate the impact.”

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