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Is passage of a local-option sales tax proof that government can work?

In Jim Prosser, Justin Shields, local-option sales tax, Mayor Kay Halloran, Rob Hogg, what worked on March 8, 2009 at 8:20 am

Listen to citizens who come to council meetings, listen to the news, listen to those outside of local government and those wanting to get in on it, and it seems nothing – nothing – works well. Government doesn’t do anything right. …

It didn’t take the Flood of 2008 to push the City Council and City Manager Jim Prosser to focus a great deal of their public comments and much of the city’s Statehouse lobbying energy on trying to figure out a way to convince the Iowa Legislature to give cities more flexibility in raising revenue.

Property taxes, the chief revenue source for Iowa cities and counties, provide most of the revenue now, and those taxes hit those who create jobs, the industrial and commercial sectors, particularly hard in Iowa.

The flood and the task of recovery from it only focused City Hall’s interest in “revenue diversification” all the more. Why can’t cities have an income surcharge or a wheel tax or a tax on alcohol and tobacco use? The nine other largest cities in Iowa joined the cause.

And lawmakers and policymakers in Des Moines spoke back. They told Cedar Rapids City Hall to use a revenue option already available to them first before asking for more. And the one chief revenue-raising source that is available is the local-option sales tax.

After all, nearly every city in Iowa has the 1-percent tax in place, and only six of Iowa’s 99 counties have county seats without the sales tax. Those six include Cedar Rapids and Iowa City.

At first, the Cedar Rapids council dithered, thinking state lawmakers might meet last fall and give some special consideration to Cedar Rapids and its flood recovery. On the city’s list of requests was to have the ability to institute a local-option sales tax without a vote by the residents.

There was no special legislative session.

By January, members of the City Council said in public that they had gotten the message from Des Moines: The city’s position would be strengthen in asking for large sums of federal and state funding if the city could show it was doing all it could to raise money locally using the taxing machinery it already had the ability to use. The council decided it would ask voters for a local-option sales tax to be used mostly for help in flood recovery.

By then, though, the state’s existing local-option sales tax law, which sets out a four-month timeline for when such a vote can be held, would not have allowed a vote before late spring.

Sen. Rob Hogg, D-Cedar Rapids, then wrote a piece of legislation designed especially for Cedar Rapids and Linn County and Iowa City/Coralville and Johnson County. The bill allowed an expedited vote on the sales tax, allowed the tax to begin to be collected immediately and did not require a metro area to vote as a block. Cedar Rapids could try to pass the tax for flood relief without worrying if Marion, Hiawatha and Robins would vote against the move and bring the tax down.

Hogg led the bill through the Iowa Legislature, the governor passed it and the City Council got the measure on the March 3 ballot.

The council assured the public that 90 percent of the funds would go to flood relief, and then in got even more specific and told the public it would be used in tandem with federal money to buy out as many as 1,300 flood-destroyed homes and rehabilitate many, many more.

The council also created an Oversight Committee to assure the public that a citizen group would help advise the council on how it spends the more than $90 million in sales-tax revenue that will be coming in over the next five years and three months.

On Tuesday, residents voted 59 percent to 41 percent to approve the sales tax.

The measure passed despite a palpable sense of frustration with the pace of flood recovery, a frustration level that Mayor Kay Halloran says she is quite aware of.

The Sunday before the tax vote, a Gazette Communications poll found the mayor’s approval rating at 20 percent and City Manager Jim Prosser’s at 29 percent, and the poll found a slight majority of residents said they had little or no confidence in the council.

In the end, with Sen. Hogg’s push in the legislature and with no little lobbying effort on the part of Halloran, council member Justin Shields and others in Des Moines, the city got a special, one-time deal out of the Statehouse for Cedar Rapids.

The city’s local elected officials — in a year in which six of nine council seats are up for grabs — then helped to make the case for the tax.

The voters this year might toss most up for election out of office. Who knows?

But each of the five people mentioned as a possible candidate for mayor –- Ron Corbett, Gary Hinzman, Scott Olson and council members Brian Fagan and Monica Vernon — supported the local-option sales tax for flood recovery.

And the tax is now in place. It will begin to be collected April 1.


City Hall kindness has not always been easy to find for neighboring jurisdictions that dump on sales tax

In City Hall, Marion, Mayor Kay Halloran on March 7, 2009 at 8:08 am

City Hall kindness is new found when it comes to jurisdictions whose voters dump on local-option tax.

On Friday, Cedar Rapids Mayor Kay Halloran was out counting noses, trying to find a majority on her nine-member council to pass a resolution, oddly, for the city of Marion.

Halloran got the votes, and as a result, the city of Marion will get a second bite at the local-option sales tax apple.

Marion city officials had lobbied Halloran and other Cedar Rapids City Council members after voters in Marion turned down the local-option sales tax on Tuesday along with the cities of Hiawatha, Robins, Center Point and the Linn County portion of Walford.

At the same time, Cedar Rapids easily passed the tax, the revenue from which it will use primarily for flood relief over the next five years and three months.

Marion stood to take in about $3 million a year during the life of the tax, which is an amount city leaders in Marion weren’t reluctant to easily turn their backs on. Particularly when the measure was defeated by 183 votes out of 4,271 cast.

The Cedar Rapids council is in the middle of the affairs of its neighboring communities because of the demands of state’s local-option sales tax law. That law, as applied to Linn County, creates only two ways to get the question of a local-option sales tax on the ballot: the Cedar Rapids City Council, which represents a majority of residents in Linn County, must do it; or proponents of the tax can amass signatures on a petition that number at least 5 percent of the total who voted in the last general election.

Halloran said the decision was an easy call for her, and she pointed to the first days after the June flood when the city of Marion stepped in and provided public-safety dispatching services for Cedar Rapids.

“So the idea is, as a matter of comity and neighborliness, they help us when we need help, and we’ll help when they need help,” the mayor said.

It was quite a different story, though, back in 2001 when Cedar Rapids and nearly every jurisdiction in the county put the local-option sales tax in place, but unincorporated Linn County rejected the matter and stood to lose about $4 million a year.

No sooner had the election office closed down on election night and the county’s Farm Bureau members and the Linn County Board of Supervisors were on the phone to Cedar Rapids City Hall, hat in hand, asking the council to put the measure up for a revote out in the county.

The Cedar Rapids City Hall has three words for the request: Get some signatures.

“Calling for a vote without a petition drive would be a departure from previous practice of the Cedar Rapids council,” the City Council said back then. The council noted that the city’s 2001 vote on the sales tax for swimming pools was supported by a petition of 5,188 signatures and that an election the previous on a minor-league baseball stadium levy was backed by 3,361 signatures before the council put the matters on the ballot.

Then-Parks Commissioner Dale Todd was the most outspoken of the City Council members back then. Who was he, Todd asked, to decide that rural residents really didn’t mean to reject the tax when they voted that way Tuesday?

Then-Mayor Lee Clancey stressed the City Council’s tradition of asking for petitions from those interested in putting an issue on the ballot.

Clearly, her preference was that any revote come from a petition drive with a sufficient number of signatures to prompt a vote without the City Council’s help.

“The citizens in rural Linn County had an opportunity to vote on this two days ago,” Clancey said. “If there is strong sentiment among the citizens of Linn County that they would like to have this revote, I think it might be an appropriate way to go to have a petition.

“Then at least we would have a feeling for what folks really would like to do. The only thing we have right now is the majority of them declined the option tax.”

Within a few days, the Farm Bureau had rounded up 10,131 county residents, more than twice the number needed to put the measure back on the ballot. Voters in unincorporated Linn, Walker and Walford then returned to the polls and passed the tax.

On Friday, Marion city officials said what was said eight years ago: Marion voters didn’t understand the complicated, quirky tax.

Lon Pluckhahn, Marion’s city manager, said on Friday that Marion council members likely would not have requested a new vote if they and he hadn’t received many calls from citizens who said they had not understood the Tuesday vote.

“I’m glad to see it,” Pluckhahn said of the Cedar Rapids council decision to clear the way for another sales-tax vote. “We’ve worked hard to improve relations between the two cities.”

He noted an e-mail from one Cedar Rapids council member who said he would not have wanted to have to get Marion’s permission if Cedar Rapids wanted a new vote.

Mayor and five possible mayoral candidates have one thing in common: All support the local-option sales tax

In Brian Fagan, City Hall, Gary Hinzman, Mayor Kay Halloran, Monica Vernon, Ron Corbett, Scott Olson on March 1, 2009 at 11:00 pm

There have been local-option sales tax elections in years past in which elected officials and would-be elected officials have deferred to the voters and not expressed an opinion one way or another of the matter.

Not this time. At least not with Mayor Kay Halloran and the five people whose names to date are afloat as possible candidates for mayor in the November election.

Halloran is a strong supporter of the local-option sales tax, as are council members Monica Vernon and Brian Fagan, both who considered possible mayor candidates.

In favor, too, of the sales tax are three other possible mayor candidates: Ron Corbett, Gary Hinzman and Scott Olson.

In recent weeks, backers of Corbett conducted a private phone survey to check out what voters might be thinking about in this year’s upcoming mayoral race.

The Corbett backers asked those surveyed to pick from five possible candidates: Corbett, Fagan, Hinzman, Olson or Vernon.

Olson, a commercial Realtor who was narrowly defeated in his run for mayor in 2005, said last week that additional taxes like a local-option sales tax do have a “negative connotation.” But he said the unique circumstance of the flood recovery “overrides” that concern. “We have many people in need,” he said.

Olson said the local revenue raised by the sales tax will help those who own flood-damaged housing but, for one reason or another, don’t qualify for federal funds. He noted, too, that a citizen oversight committee will be in place to help direct how the sales tax money is spent.

Hinzman, director of the Sixth Judicial District Department of Correctional Services and former Cedar Rapids police chief, said last week that he normally doesn’t jump at a tax increase.

“But it makes better sense than having no concept as to how Cedar Rapids bails itself out of this disaster,” Hinzman said. He said the sales tax will help the city “recover and heal as a community.”

“Without the local-option sales tax, it will be extremely difficult to get beyond the past,” he said.

Corbett, vice president at trucking firm CRST International Inc., said passing the local-option sales tax will “definitely improve” the city’s chances to secure increased federal and state funding.

“Given the scale of our disaster, we can’t pretend that we can recover and redevelop without these funding sources,” said Corbett, past president of the Cedar Rapids Area Chamber of Commerce and former speaker of the Iowa House of Representatives.

He said the local-option sales tax will provide a temporary “window of opportunity” that will give the city time to work hard to recruit companies to the city to add jobs and rebuild the city’s tax base.

Mayor’s speech downtown is a reminder that all is not well there

In Brian Fagan, City Hall, Justin Shields, Mayor Kay Halloran on February 28, 2009 at 6:48 am

A mayor’s annual address on the condition of the city is generally an upbeat affair with a focus on the accomplishments in the year past and the ones sure to come in the year ahead.

That was the case on Friday when Mayor Kay Halloran and Brian Fagan, mayor pro tem, spoke at the League of Women Voters of Cedar Rapids/Marion’s annual State of the City luncheon.

This year, though, it was hard not to feel how far there is yet to go in the city’s recovery from the June 2008 flood, a recovery that must come in the midst of a troubling national economic downturn.

Friday’s event was held in what over the years has become the lone downtown venue for such gatherings: The Ballroom of the Crowne Plaza Five Seasons Hotel.

The hotel is in bankruptcy and being run by an interim hotel manager, and for more than a year now, the hotel chain that owns the Crowne Plaza moniker has threatened to withdraw it from Cedar Rapids only downtown hotel.

The previous owner of the hotel had been required to upgrade the building to keep the Crowne Plaza name, and, in fact, much of that work was completed, reports Patrick DePalma, chairman of the city’s Five Season Facilities Commission. The rooms still need new TVs, and, more to the point of the mayor’s Friday speech, there is still a need to upgrade the hotel’s Ballroom, DePalma says.

One of the typical routes to The Ballroom is through the entrance to the U.S. Cellular Center, which is joined to the hotel. You walk in the center’s lobby and head up the towering escalator to the next floor to get to the hotel lobby and The Ballroom. But the escalator has been out of service since the machinery that drives it took on water in the June flood.

Nearly nine months after the flood, there surely are some who, hiking up the stationary escalator steps, aren’t wondering if the city’s recovery from the flood will ever come.

The city’s Facilities Commission oversees the city-owned event center and it plays a role in the hotel because the city owns the land and air rights for the hotel.

The commission’s DePalma says he’s tried to impress on the city the need to get moving on fixing the flood damage to the U.S. Cellular Center’s lobby and to the escalator there. He says the work is dependent on funds from the Federal Emergency Management Agency, and he says City Hall controls the schedule on which of the many flood-damaged city properties gets fixed first.

“We’ve talked to the city and said, ‘Let’s get this done,’” he says. “The work that needs to be done is fairly minor in terms of how much it would take and how much it would cost compared to (other projects).”

DePalma says the city’s first focus in the downtown is to fix elevators in damaged parking ramps.

“We understand that,” he says. But he says he hopes the U.S. Cellular Center comes soon after.

“Any pressure you can put on them,” DePalma says. “It’s not a difficult thing to take care of. But I can’t hire a contractor.”

Under consideration, he says, is doing away with the escalator and replacing it with an elevator and a staircase.

The public now can ride the elevator next door that leads into the hotel lobby on the second floor.

For whatever reason, the audience was a little smaller this time for the mayor’s annual address. The League of Women Voters put the count at about 300, down about 60 from the year before.

Six of nine City Council members did not attend to hear their council colleagues, Halloran and Fagan, speak. Council member Justin Shields was on hand.

The center of the city’s government has been operating out of an office building in a northeast Cedar Rapids office park since the flood. The council holds its formal Wednesday evening meetings in an auditorium nearby on the AEGON USA campus. The flood-damaged City Hall downtown remains empty and awaiting renovation.

Stealth ‘Condition of the City’ address has Halloran assuring city is ‘open for business;’ Fagan says city’s flood recovery will be a model for the nation

In Brian Fagan, City Hall, Floods, Mayor Kay Halloran on February 25, 2009 at 7:33 pm

Without prior promotion, Mayor Kay Halloran and Brian Fagan, mayor pro tem, last night gave a Condition of the City speech, saying the city is working to recover from disaster in a way that makes the city better than ever.

The speech was part preview: Halloran is scheduled to reprise her comments at a public forum on Friday.

In PowerPoint-aided comments, Halloran last night forewarned Cedar Rapidians that “times will be difficult” in the city for the next few years as the city works to recover from the 2008 flood.

At the same time she assured that the city is “open for business” and she promised that she and her council colleagues will be “vigilant” on spending and continue to work to bring about an even more cost-effective, customer-friendly city government.



Halloran said, too, that the city will continue to work hard to change “very draconian” state policies that she said force cities to be too dependent on local property-taxes. Those taxes “gouge” the city’s businesses and residents and will “cripple our city” as it works to recover, she said.


Fagan said the state of the city’s condition is a tale of two cities — a city before the flood and a city recovering from a flood.

Fagan recalled the images of last June, calling them “difficult” and at the same time “inspiring” and “representative” of the giving and generosity of Cedar Rapids.

Fagan said the city’s needs and costs remain “staggering,” and he put the cost of recovery at between $2 billion and $5 billion. For housing needs alone, the city needs more than $200 million to fix, buyout, relocate and rebuild housing, he said.

In citing the dollar figures, Fagan addressed head on the frequent criticism often heard about the City Council’s use of consultants that have and are providing the city with what Fagan called “expert guidance” in the flood recovery.

He put the cost of consultants at about $5 million, defended the spending and said the expertise was the city’s best way to ensure that Cedar Rapids’ flood recovery is “the best recovery this country has ever seen.”

Fagan, too, talked about the city’s plans to make sure it renovates or rebuilds some 300 flood-damaged public city buildings and facilities in the best way it can for future generations.

He made reference to a comment last week from a Linn County supervisor, who suggested that the city was pursuing wants and not needs as the city talked about the possibility of building new facilities. It meets a public need to study rebuilding options to see what best serves customers and what is sustainable, efficient and affordable for the long term, Fagan said.

In the city’s flood recovery, Fagan singled out several high points: the public-private effort that saved the city’s water supply; the city’s ability to get its waste-water treatment plant back on line quickly; the city’s ability to get a flood-protection plan in place in four months. The speed of the latter two accomplishments was unrivaled in the nation, he said.

Fagan said the last eight months has brought some “incredibly tense times” and plenty of “vigorous debate” at City Hall and throughout the community.

For all of it, the city will come through the recovery a better city, he said.

EPRC works to matter; its director, Doug Neumann, tightropes a middle ground with gentle kicks at ‘mayor’s office’ and business leaders who are ‘off track’

In City Hall, Floods, Mayor Kay Halloran on February 24, 2009 at 10:01 am

The day you know what EPRC stands for may not come until the day is closer for the upstart Economic Planning and Redevelopment Corp. to have a quantifiable victory or two for Cedar Rapids’ flood recovery.

Even its director, Doug Neumann, says the acronym is little known and the corporation’s name is pretty cumbersome and bureaucratic-sounding.

But Neumann told the Downtown Rotary this week that the name is what it is and that he and the endeavor had bigger fish to fry. The EPRC’s singular goal, he says, is to find money, particularly from the federal and state government and other non-local sources, to help with the city’s flood recovery.

In that regard, the group is trying to tap the U.S. Department of Commerce’s regional office in Denver, Colo., for $22 million to help fix railroad congestion downtown, support a fiber-optic system for public entities and create a Regional Economic Commerce Center.

The EPRC calls itself a private-public partnership and it has City Council member Monica Vernon, and Linda Langston, Linn County supervisor, on its four-person board.

But make no mistake: The EPRC is where local players in Cedar Rapids’ private sector can focus their muscle to help get the city back on its feet again.

The endeavor’s creation about four months ago came, in part, out of a frustration that City Hall couldn’t do it all, but that it might want to try to.

Apparently, there were some fears with some at City Hall that the private players’ real intent was to create a “shadow government” to run flood-recovery.

In any event, John Smith, president/CEO of CRST International Inc. and the chairman of the EPRC, felt obliged to assure the Downtown Rotary Club earlier this month that the EPRC was not a shadow government. Neumann did the same this Monday.

At the same time, though, Neumann said the EPRC’s intent was to “talk frankly and clearly about progress and problems” in the city’s flood recovery. He then ventured ahead to do so gently.

“When I say that we’ve lacked a strong, confident public voice from the mayor’s office, I don’t say that for any political purpose or because I wish ill-will toward anyone,” he told a crowd at the Downtown Rotary Club on Monday. “I say it because it’s important to identify that shortcoming as one of the major factors impacting long-term economic redevelopment and flood recovery.”

Of note, Neumann, who worked many months on City Hall’s Recovery and Reinvestment Coordinating Team as president of the Downtown District, did not direct his City Hall criticism at City Manager Jim Prosser or the City Council as a whole.

Then he had this to say for the private sector:

“And when I say that some business leaders are off-track when they say there has been no planning for flood recovery, or that they’ve been far too public with that criticism, I don’t say that to be defensive about progress or to pick a fight with anyone.

“I say that because we know that when those comments wind their way to Des Moines and Washington, D.C., that it severely hampers our efforts at long-term economic redevelopment and flood recovery.”

Mayor Halloran reports: Council’s plan for now is a 5-year sales tax; 20% for property-tax relief, 80% for flood relief

In City Hall, Mayor Kay Halloran on January 29, 2009 at 1:24 pm

The Cedar Rapids City Council’s preliminary draft of ballot language for a March 3 local-option sales tax vote will ask voters in Cedar Rapids to approve the 1-percent tax for five years beginning April 1, Mayor Kay Halloran reports.

Additionally, the draft language calls on the revenue raised by the tax to be used in Cedar Rapids in two ways: 20 percent of the revenue would be used for property-tax relief; and 80 percent would be used for flood protection and for the acquisition and rehabilitation of flood-damaged housing, the mayor said.

Halloran noted that the language is in draft form and could change.

The Cedar Rapids City Council indicated Wednesday evening that it is at the ready to put a local-option sales tax on the ballot March 3.

It is awaiting word from Des Moines to see if the Iowa House follows the Iowa Senate and gives the city and others in disaster areas permission to set aside current timing procedures and get the measure on the ballot on March 3.

The legislative measure, as now written, would require cities intending on a March 3 vote to approve a measure by Tuesday, Feb. 3.

Halloran said the City Council is prepared to vote to put the measure on the ballot before the Feb. 3 deadline once the Legislature approves it and the governor signs it. Halloran has said the governor has told her he will sign the measure.

A 1-percent tax is expected to raise between $18 million and $23 million for the city of Cedar Rapids, city officials have estimated.

Mayor Halloran tracking Statehouse voting, says council poised to call a March 3 sales tax vote for ‘flood recovery’

In City Hall, Floods, Mayor Kay Halloran on January 27, 2009 at 9:03 pm

Mayor Kay Halloran on Tuesday evening said the City Council is at the ready to set a vote for March 3 on a 1-percent local-option tax to help with flood recovery. A portion of the money raised — between $18 million and $23 million a year — will go to lower property taxes, she said.

Any move by the council to set a March 3 referendum, though, is contingent on the Iowa Legislature passing a special piece of legislation that set aside some timing issues to allow for an expedited vote on the local-option sales tax issue. Cedar Rapids legislators, Sen. Rob Hogg and Rep. Tyler Olson, are trying to steer the bill to passage.

The law would apply to cities in every county in Iowa that has a disaster declaration. But most cities in Iowa don’t need any help. They already have the tax in place. Only six county seat cities — Cedar Rapids, Iowa City, Des Moines, Adel, Indianola and Ida Grove — don’t now have a local-option sales tax.

After last night’s City Council budget session, Mayor Halloran was looking at her Blackberry phone to check on the votes in the Legislature. The Senate had passed the measure and had sent it on to the Iowa House, city staff members had reported to her.

Halloran said Gov. Chet Culver has told her he intends to sign the legislation into law if the Legislature passes it.

Halloran emphasized last night that the local-option tax in Cedar Rapids will be used for flood recovery and reducing property taxes.

For now, those property taxes are slated to jump in the new budget year beginning July 1 as the city tries to balance a budget with lost revenue from flood-damaged properties and new costs associated with flood recovery.

Living legends might be among those in the hunt for Cedar Rapids mayor

In Brian Fagan, City Hall, Gary Hinzman, Mayor Kay Halloran, Monica Vernon, Ron Corbett, Scott Olson on January 19, 2009 at 7:30 pm

It’s not easy getting your name affixed to a public building, especially if you have not given oodles to build the thing or you’re still alive.

Even so, two individuals mentioned in the last week as possible candidates in this year’s Cedar Rapids mayoral race — Ron Corbett and Gary Hinzman — both have managed to get their names on public buildings.

Corbett’s name is on the Corbett-Miller residential cottage at the Iowa Boy’s Training School at Eldora.

And Hinzman’s name is on the Gerald R. Hinzman Center, a residential correctional facility on the southwest Cedar Rapids campus of the Sixth Judicial District Department of Correctional Services. Hinzman has been executive director of the department since 1989.

Corbett’s placement of his name on a building came in 2000, the year after he left the Iowa Legislature as Speaker of the House to become president of the Cedar Rapids Area Chamber of Commerce. He left the Chamber in 2005 to become a vice president at CRST Inc., a Cedar Rapids trucking firm.

Corbett, as House speaker, shares space on the Training School cottage with Tom Miller, the Iowa Attorney General. Both were credited with working “to develop a spectrum of services for troubled juveniles,” according to the legislative action placing the Corbett and Miller names on the Eldora cottage.

Hinzman, a former Cedar Rapids police chief, joined the Department of Correctional Services 20 years ago.

In that time, he moved the department’s operation from a neighborhood setting to a campus in an industrial area on the edge of town. From there, the campus and its services have expanded. His department’s board decided to affix his name on one of the new buildings that has gone up on the campus over the years.

Three other names also have been circulated now as mayor possibilities. They are current council members Brian Fagan, an attorney, and Monica Vernon, a business owner, and former mayoral candidate Scott Olson, a local Realtor.

Mayor Kay Halloran said she won’t comment on a reelection bid until after the Iowa Legislature is done with its work, which usually comes in April.