The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

No to local-option sales tax vote March 3, says group called Cedar Rapids Tea Party

In City Hall, Uncategorized on February 12, 2009 at 3:30 pm

There has been quite an outpouring of organized support as the March 3 vote approaches on a 1-percent local-option sales tax.

The City Council supports it. There’s a local grass-roots group, Vote YES! For Our Neighbors. The Chamber of Commerce, Downtown District, Hawkeye Labor Council, the Next Generation Commission, the Convention and Visitors Bureau and on and on.

That surely doesn’t mean there aren’t opponents.

Tim Pugh, who identifies himself as a 32-year-old small business owner, is leading a group that calls itself Cedar Rapids Tea Party.

Pugh says he has about 75 people who have signed for the cause to date.

He handed out a flier at the Wednesday evening council meeting: “Now is NOT the time to get LOST,” the flier reads. LOST, of course, is local-option sales tax.

The 1-percent tax is expected to raise between $18 million and $24 million a year for five years and three months, with 90 percent going for flood relief and 10 percent for property tax relief. Cedar Rapids Tea Party says the portion going to property-tax relief is “pennies for Homeowners.”

The group wants the city to cut waste in its budget, not raise taxes. The group says the city already has “squandered” flood relief funds.

Carol Martin, the well-known critic of City Hall spending, also is organizing a network of sales-tax opponents separate from Tim Pugh’s group.

Two efforts focused on the same message is a good thing, Martin said Thursday.

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  1. I remember, what seems like not that long ago, when our sales tax was 3%. If they had taken a vote at that time to raise the tax(by 4%) to 7%, they would have been run out of town on a rail. Instead, they have slowly “tweeked” it upward 1% at a time. Our tax would be 7%. People need to think 7% not the 1% increase. As proven in the past, they can say 5 years, but this tax will never go away. When is enough, enough? These points need to get out, and soon.

  2. I sick of hearing about public agencies alwasy asking for more money, especially when the use the money we give them in such a wastefull manner. (ie: look at any city vehicle with two or more persons justy cruising around, as a contractor I know efficiency is paramount to sustained profitability) Many other examples about, schools, streets, etc.

  3. Do we all remember the local pool fiasco. Where lets see we spent the money in this town and so that is how the city got the money to build the pools and now that they are here we have to pay OUTRAGEOUS entry fees to get into the pools. Well there ya go case in point the city of cedar rapids has NO CLUE on how to use a local option sales tax. VOTE NO!!

  4. The pools are completely different, as they should have been paid as part of a capital improvements plan, not from a local option sales tax. Instead of closing all 5 pools at the same time and losing all of that revenue for a full season, they should have raised the fees and done the pools one at a time, over the course of 5 years, using money paid for by the users of the pool system.

    I have never been to a municipal swimming pool, and don’t ever plan to go to one. I don’t see why it’s unreasonable to ask those that use the pools to pay for them, the same way golfers pay for the golf courses and boaters pay for the harbor.

  5. Dreaming is funny, but not realist. If you are going to talk the talk, as with the above saying, “The group says the city already has “squandered” flood relief funds.” Then you need to show the prove. Playing on people’s fears is wrong. If you going to rant at least back it up with prove. Show us where the waste is…..

  6. please dont vote on new tax as it wwnt help all of the people in the flood as in my area 30 people are on buy out list and only 15 want it so the money is going where? as by law it can only be used for buy out and nothing more or less so its not a fair tax as monica vernon said the rompot area will only get buy out and nothing more to help other in the flood here so who get the money?

  7. Kevin,
    Thanks for the note. The City Council has said it will use local-option sales tax revenue for housing acquisitions, but also housing rehabilitation and other housing-related issues. I think the city’s plans in Cedar Valley/Rompot are specific to that neighborhood. The city intends to work one-to-one with homeowners there to see what each wants to do. The cost of building a levee there is too great for the relatively small number of homes, the city has said. — Rick Smith

  8. we were told that the city want to give us flood protion but we were told its the corps who dont want to spend the money we were told this by brian fagan and jim prosser and tom p so who are we to belive?

  9. Let’s get this one red herring argument out of the way…the local option sales tax BY LAW will expire in five and-a-quarter years. It cannot be re-upped without voter approval.

    The original sales tax was for the state, not passed by city and county bodies, so that’s comparing apples to chairs.

    The sales tax for the pools was for construction and rehab, now subsidizing entry to the pools. I have taken my kids to every pool, and I can’t remember NOT seeing people I knew of every economic stripe there.

    I think there is always a place to make sure the general fund budget is examined and money is saved where it can be saved and spending is done wisely. Now, the alternate thought to the local option sales tax to consider is that without these funds, it is not possible to match federal money to take care of some of the problems that exist. With the federal and state funding absolutely creeping into Cedar Rapids, Linn County and the State of Iowa, this isn’t a “bailout,” but backfilling a hole created by ineffective and inefficient allocation and execution as far as getting resources here.

    Something to think about…if I recall, each penny in property tax is equivalent to roughly $50,000 in tax revenue for the city. If $18 million in revenue is brought in annually in a local option sales tax (approximately 40% of which is paid by people from outside Linn County), 10% of that, $1.8 million, would mean an initial reduction in annual property taxes of 36 cents per thousand in allowed valuation (about half the actual valuation). That means an annual approximate $180 reduction on a $100,000 home. That means I’d have to spend $18,000 on sales taxable items in order to get to a break even.

    Rick, correct me if I’m wrong on that.

  10. dont be fooled by the 1 cent tax have the city put it in writing then we will know for sure as they the city says only the first yr is for flood rebuild and rompot is not going to get any part of tax just the buy out but most but what a bout the other who not on buy out list no tax dollars for them but they want flood vitem to vote to buy there property with there tax dollars will not take buy out so the tax is unfair if its not for every one

  11. well i know that the city says the 1 cent tax is for buy out and such most of my friends have started to move back in theres home as by fema rules the money they got was to rebuild so if theses people who have spent the money for rebuilding and if they chose to take buy out the city has to repay them for what they have spent along with the price of the home pre flood vaule so now our tax dollare will be wasted once again as the city should not have let the people on the buy outlist put any tax payer monies in there homes now for my house if i take the buy out the city will have to spend 70 grand 60 grand for the property and 10 grand for what i have spent rebuildins so i can get the value of my house should we tax payer pay for our own buy out?and its going to cost more tax dollars for others in city as well

  12. the tax that the city will use for flood recorvery is for one yr only then after that its for what ever they want like roads this was told to us all in the newpapers be for the vote was to become in action so please dont be flood once again

  13. Kevin,
    Thanks for the note. City officials report that any FEMA money put back into a home will not be deducted from the buyout figure. The city’s plan it to offer 100 percent of the pre-flood value of the house. — Rick Smith

  14. yes i know but its still awaste of tax dollars as the city should have not let people spend any fema money that they have to repay for the buy out of homes in the grenway area they knew well in advance and thats why the city need more tax dollars to to repay others back for what they have spent on there homes not its going to cost us all more money

  15. so every one should wait for the army corps to finish there study be for any one in the green way should take a buy out the city is pushing for a buy out now before the corps finish there study to they wont have to portet them as they took the buyout

  16. Regardless of whether this comment I’m about to make gets posted or not, I’m struck by how far punctuation, capitalization, and spelling can go towards legitimizing one’s argument…

    I do take a bit of issue with the contention that the tax can only be re-upped by citizen vote, as the State has shown that it has very few qualms about converting local option taxes into state taxes, even if the state tax is allegedly for the same purpose as the original LOST.

    I have a VERY sour taste in my mouth after voting for a 10-year LOST for schools and having had the state convert that to a perpetual state tax that I no longer have the Local Option to renew or sunset. If all 99 counties pass LOST’s to help with flood recovery and economic development in the face of the recession, the state can use the “all 99 counties have the same tax rate now” argument again to continue to raise the state sales tax.

    It’s not a very strong “slippery slope” argument, but my distrust for those in Des Moines is always going to be in the back of my mind any time a LOST referendum is up for a vote now and in the future.

  17. JB, the state will do what it wants to. I can’t imagine that the capitol would remain standing if we voted for it and they came in and appropriated it.

    And kevin, once the option tax is passed, the only way they can change to allocation is by popular vote. As an example, Davenport is having a vote on the 3rd to reallocate their tax. Also, it sunsets after the term expires (5.25 years in this case). The City Council can’t just extend it.

  18. Rick, Does anybody remember the ball park levy the city put on a few years back to help fund the new ball park, and when it expired it was NOT rescinded and left in place to put more money in the general revenue. We didn’t get to vote on that.

  19. The veterans levy approved in a democratic election was used for part of the funding for the ballpark and nothing else. By law, the veterans commission levy can only be used for veterans commission issues and not for the general fund.

  20. I didn’t mentally check the numbers until now, but, “Something to think about…if I recall, each penny in property tax is equivalent to roughly $50,000 in tax revenue for the city. If $18 million in revenue is brought in annually in a local option sales tax (approximately 40% of which is paid by people from outside Linn County), 10% of that, $1.8 million, would mean an initial reduction in annual property taxes of 36 cents per thousand in allowed valuation (about half the actual valuation). That means an annual approximate $180 reduction on a $100,000 home. That means I’d have to spend $18,000 on sales taxable items in order to get to a break even.”

    I don’t have the time right now to fact-check the property tax revenue numbers, so even assuming that that’s true, most of the rest of the statement is inaccurate. Linn County’s Sales Tax “pull factor” is only 1.21, meaning that Linn County is selling to 121% of its population, so approximately 16% of Linn County’s sales tax is paid by people from out of the county. Cedar Rapids’ Pull Factor is 1.66, so in Cedar Rapids, approximately 39% of sales tax is paid by people who don’t live in Cedar Rapids.

    Further, the property tax reduction is off by a factor of ten. It would actually be a reduction of only $18 (eighteen) on a $100,000 home. However, with the taxable value only about 45.56%, it’s really a reduction of about $16.50 on a $100,000 home per year. $16.50 in a 1% sales tax isn’t much more than a big, fancy $1,650 Plasma TV, or a smaller TV and a few movies. I would venture to guess that most people in Cedar Rapids spend much more than $1,650 a year on taxable goods. It’s a net loss for property owners.

  21. How is it that the organizations pushing this tax increase can get away with robo-calling cell phones? The FCC specifically prohibits telemarketing to cell phones. The only thing these people have accomplished is to lose my vote.

  22. The ultimate kick in the crotch will be if people start patronizing the car dealerships in Hiawatha, Center Point, and Marion to avoid the additional 1% sales tax in Cedar Rapids. Unless the 1% tax doesn’t apply to automobile sales, of course.

    Either way, having a large number of contiguous cities without the LOST when C.R. has it, for 5 1/4 years, could significantly change the dynamic of retail business along the fringes of the city for years to come.

  23. Tim pugh is trying. To steal my girlfriend he’s a lowlife and can’t go find own girl he has to try and steal mine loser

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