It’s not exactly been wailing at Cedar Rapids City Hall in the last year or more.
But it is certainly correct to say that there has been very much talk from City Manager Jim Prosser and the majority of City Council members that Iowa cities need more diversified ways to raise revenue. Now they are stuck primarily with property taxes.
In recent weeks, the City Hall lament became more than spitting in the wind when state Rep. Tyler Olson, D-Cedar Rapidcs, floated a bill in the Iowa House late in the now-completed legislative session. The bill proposed allowing several “pilot” cities in Iowa a chance to try other revenue-raising tactics. Revenue raised via alternative means would offset revenue raised by property taxes, according to the bill.
Among the other revenue sources might be franchise fees on utility bills, a local sales tax without a need for a referendum and even a police/fire fee. The thought behind most of the alternative fees and taxes is that people who don’t now pay property taxes in a particular jurisdiction — out-of-towners and nonprofits, for instance — would then contribute to the operation of basic city services like police, fire, streets, parks and so forth.
Earlier this week, Cedar Rapids City Council member Brian Fagan, who was among City Hall figures to lobby state lawmakers on the revenue issue, noted that lawmakers did little with the idea this legislative session.
Fagan said the thought of introducing the measure was to float an idea, to start a conversation, to identify who might be with you and who might be against you.
Then on Thursday, a news story in The Des Moines Register reported that state Senate Majority Leader Michael Gronstal, D-Council Bluffs, told that newspaper’s editorial board that he expected that top legislative leaders next year will review property-tax-relief legislation that would provide cities with new revenue options just as Cedar Rapids City Hall has been agitating for.
“More choices for local governments, I think that makes some sense,” Gronstal told The Register.
State lawmakers have talked about property-tax relief for some years, particularly for commercial and industrial property owners who pay tax on all or nearly all the value of their property. Residential property owners pay tax currently on only 44 percent of the value of their property.
Come next year’s legislative session, a two-year legislative study of the property-tax issue will have been completed and lawmakers will be forced to confront the matter.
Don’t expect any lovefest.
Iowans for Tax Relief, for one, came out against much of the revenue-diversification idea, calling it a tax shift that “would bury” middle-class and low-income residents with new fees while doing nothing to control the cost of local government.