Alliant Energy, City Water rates... increasing, so will Iowa State Income Taxes be next?

Take a look at the Wednesday, February 25, Radio Iowa article titled, "Democrats suggest massive tax overhaul a possibility." For more on taxes issue, read the Public Interest Institute article: "No Income Tax: The Key to Economic Growth."

We face a very challenging recession, property taxes are expected to increase. Voters in Cedar Rapids and Linn County will vote on March 3Rd to raise their sales tax by one percent. Now, it appears the State of Iowa is going to look to raise state income taxes.

Economic development and job creation in the State of Iowa may find the road tougher and tougher in the private sector. Commercial and industrial property taxes are already hit hard in the State of Iowa.

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March 3Rd Local Option Sales Tax approaching for Cedar Rapids and much of Linn County, Iowa

Is the Cedar Rapids ballot language clear and well written? Unlike Iowa City, the City of Cedar Rapids rushed to get the sales tax thrown together and on the ballot for a March 3Rd vote. The City of Iowa City took their time and will vote May 5, 2009, as Iowa law provided.

Does Cedar Rapids have other options? Yes, they can redraft the language and get it right for taxpayers for an August 4, 2009 or November 3, 2009 vote. The City of Cedar Rapids can re-write the language and a re-vote is possible, if the voters in the City of Cedar Rapids turndown the March 3Rd ballot language. The following article by The Gazette's Adam Belz answers questions on the local-option sales tax points out this option for the City of Cedar Rapids and taxpayers (voters).,

For more information on the upcoming vote on March 3rd in Linn County, visit the Linn County Auditor's web site.

The Gazette has another interesting development on the upcoming Local Option Sales Tax.
Sales tax law change affects amount to counties The Gazette points out...

A little-noticed change that is part of the state's new local-option sales
tax law significantly reduces the amount of revenue coming to unincorporated
Linn and Johnson counties and increases the revenue that could go to the city of
Marion and Iowa...

Cedar Rapids State Senator Rob Hogg worked out a change in the State's formula, as the article points out.

The City of Cedar Rapids did rush the vote for March 3Rd. They are completing resolutions to clean up the damage, but voters should be careful, because like the Board of Supervisors pay issue, the City Council can change resolutions as easy as they create them. The ballot language is what really is key, when reviewing the merits of a 5 year and 3 month local option sales tax.

On Monday, Doug Neumann of the ERPC discussed with the Rotary Club of Cedar Rapids as The Gazette reported in the following article Cedar Rapids recovery group asks for $22.4 million.

What happens if local-option sales fails... as The Gazette web site is painting...

Ask Rob Hogg what will happen if the proposed local-option sales tax fails
March 3 in Cedar Rapids, and he paints a grim picture. The state senator
envisions blocks and blocks of abandoned homes rotting in the summer heat and
humidity, surrounded by... More
>>

Well, one real option for the City of Cedar Rapids and taxpayers have is a re-vote and better ballot language. There is more than one way to skin a cat. If Cedar Rapids needs to get a "skin in the game" shouldn't it be done right?

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Where's the Oversight on the 1% Local Option Sales Tax for Cedar Rapids?

Re: The March 3, 2009 Sales Tax Vote for the City of Cedar Rapids.

Today, we received the following cover letter ahead of a short one question e-mail survey on the 1% local option sales tax (LOST) for the City of Cedar Rapids from the Cedar Rapids Small Business Recovery Group.

The Cedar Rapids Small Business Recovery Group would like to take a
straw poll of flood affected businesses to gauge where the flood affected small
business community is on the Local Option Sales Tax issue:

Framework of the sales tax:

Rate of Tax: 1% Sunset Period: 5 years and 3 months (4/1/09-6/30/14)

Oversight Committee: A citizens committee will be formed to decide the
funding priorities and options for the money raised

Ballot Language: For the City of Cedar Rapids: 10% for Property Tax
Relief; and The specific purposes for which the revenues shall otherwise be
expended are: 90% for the acquisition and rehabilitation of flood damaged
housing caused by the flooding of 2008, and matching funds for federal flood
dollars to assist with flood recovery or flood protection.

We have supported the need for discussion of a 1% local option sales tax, ever since the change in the form of government. Property tax relief and infrastructure repairs and replacement were certainly needed prior to the Flood of 2008. The State of Iowa and the City of Cedar Rapids have an over reliance on property taxes. Right now, the City Manager and City Staff are recommending a 14.7% increase on property taxes for next year's budge. The City Council disagrees at this point on such a high increase.

But, here are our real problems with the 1% local option sales tax:

1. Ten percent isn't significant property tax relief for the City of Cedar Rapids, especially after 20 percent was discussed by our Mayor.
2. The Tax isn't defined as the Small Business Recovery Group's survey pointed out: "A citizens committee will be formed to decide the funding priorities and options for the money raised"
3. So, who is going to oversee the oversight committee?
4. We are concerned about inequities in the tax as it is defined on the ballot.

The local school SILO tax was specifically spelled out and there was a clear oversight committee to review the performance of the tax that it was going to the items laid out in the ballot language. Of course, the State of Iowa has decided to strip the local school tax and take it statewide permanently.

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A Return to open-ended welfare with Stimulus?

"The House stimulus bill endangers Clinton's biggest reform." -WSJ

The Tuesday, February 10, 2009 edition of The Wall Street Journal in the Opinion section featured an article titled, The Return of Welfare As We Knew It. For more on this issue, read Public Policy Institute Brief: Federal Experiment in Welfare Yields Success.

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Transapaency and Accountablity in State Government

The Monday, February 9, 2009 edition of The (Cedar Rapids) Gazette in the Iowa Today section featured an article titled, Lawmakers want to know about bailout money. For more on transparency in government, read Iowa Economic Scorecard: Transparency in State Spending Encourages Limited Government.

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Is Washington going the right direction on Stimulus?

The Thursday, February 5, 2009 edition of The Washington Times features a story, Obama prods senators on stimulus.

It's interesting to see other cities wanting stimulus, while Cedar Rapids waits for Federal aid due to the Flood of 2008, reflecting on our City Manager's comments regarding the first 90 days for Grand Forks compared to relief received for Cedar Rapids.

The size of the House plan and the pork elements in the plan give cause for concern in the Heartland? For more on economic reform read the Public Interest Institute Brief: Ryan's roadmap.

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Rebuild Iowa Office: Opens satellite location in Cedar Rapids nearly eight months after Flood of 2008

It has taken nearly eight months, since the Flood of 2008 rolled through the City of Cedar Rapids, but a Rebuild Iowa Office has opened a satellite location here in Cedar Rapids. For more information on recovery in the Corridor... the following web site has been set up since the early days of recovery.

Information on the 1% LOST, local option sales tax vote for March 3, 2009.

Linn County Board of Supervisors Approves Local Option Sales Tax Resolutions

Cedar Rapids City Council Approves LOST Resolution

The City of Cedar Rapids Budget in 2006 was $292 million. Today, the city budget stands at $351.7 million.

From the sounds of it, city water rates will increase 14% and property taxes will raise six to ten percent, depending on whether it is commercial, industrial or residential property. The new 1% local option tax could raise the budget as much as $18 million per year. Plus, a six to ten percent increase in property taxes, which account currently for 24.1% of the $351.7 million budget, could likely add another $5 to 6 million?

It looks like the $292 million city budget before the vote to change the Cedar Rapids form of government in 2005 has gone from $292 million to a future budget of roughly $375 million, in less than four years into the new form of government?

The City of Cedar Rapids have a long recovery ahead, as The Gazette article on July 12, 2008 predicted, one month after the June 2008 flood. Our City Manager pointed out recently...

“So far, the City of Cedar Rapids has only received $38 million in Community
Development Block Grant funds. In comparison, ten years ago the City of
Grand
Forks, ND received $135 million from the federal government within 90
days of
its devastating flood,” - Mr. James Prosser, City Manager

Cedar Rapids was and needs again to be an economic engine in the State of Iowa. With a $5 to $6 billion now being communicated, the early projections appear to be vastly understated from today's figures being discussed within the community. This link talked about $1 billion for Cedar Rapids. It appears early numbers may have hurt our community, as compared to other cities that received aid in the past.

Further, unlike back in April 1997, when the Grand Forks was devastated by a flood, the City of Cedar Rapids faces road blocks in Washington D.C. and with the current economy. Further, leadership needs to come from somewhere.

Regardless of the Flood of 2008, efforts by our City Manager and City Council were in place to find ways to increase revenue for the City of Cedar Rapids. Lobbying efforts were in full gear as the City of Cedar Rapids celebrated the "Year of the River" in 2008.

The Solution likely isn't in new taxes. But, like the advise that Ed Failor, Jr. President of Iowans for Tax Relief gave to State of Iowa and our Governor: "The problem is out-of-control government spending and budgets."

What if Cedar Rapids took the current budget and cut out-of control government spending and took the savings and put it into Flood mitigation and infrastructure priorities?

"We know from experience that when you raise taxes during an economic
downturn, you hurt the economy," - Steve
Forbes

"Raising taxes — we tried that in the Great Depression.
We tried
that in the 1970s. We tried that in the 1990s. I don't know why we
have
to run
this bad movie again." - Forbes

We currently have a $351.7 million budget. The solution for the near future is better priorities and cuts in wasteful programs. Not more taxes. If we don't maintain our economic engine in Cedar Rapids, we may end up even worse off than we are now.

Further, Iowa's Tax System isn't outstanding. Instead of overhauling the system, our State Legislature is looking to expand tax options for cities and counties. We need to find ways to encourage growth in Cedar Rapids, not discourage it.

Per the Chamber of Commerce release today:

The 1% local option sales tax is not for flood mitigation infrastructure, but...

"The ballot language states that 90% of the tax will fund the acquisition and
rehabilitation of damaged homes, as well as, support relief efforts toward
damages caused by the 2008 Cedar River flood. While 10% of the funding will be
used to offset the property tax burden."

The original discussion reported last week was as follows: "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," according to The Gazette's Rick Smith and comments from the Mayor.

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City Council approves $132 million in Public infrastructure recovery plan

KCRG-TV reports in a story titled CR Council Approves $132 Million Recovery Plan. The biggest highlight to the plan is that the City Council wants to proceed with plans to "repair, restore and improve" the historic Paramount Theatre, along with other infrastructure.

The KCRG story highlighted the following infrastructure approved for repair, restore and improvements:

Infrastructure that could be completed by the Fall of 2009 (according to consultants hired by the City of Cedar Rapids):

• 4th Avenue Parkade
• 3rd Avenue Parkade
• GTC Parkade
• Jones Golf Course
• Ellis Pool
• Cheyenne Park
• Mohawk Park
• Seminole Valley Park (non-historic)
• Indian Creek Nature Center
• Tait Cummins Sports Complex
• Riverside Park
• Czech Village Park

Infrastructure that could be completed by 2010

• Ellis Park Buildings
• US Cellular
• Old Fire Station at Science Station
• Ellis Harbor Infrastructure
• Riverfront Maintenance Buildings
• Time Check Recreation Center (could be potentially relocated)

There are some serious questions still for the following infrastructure:

• Central Fire Station
• The Library
• Veteran's Memorial / City Hall

Further the following infrastructure is still under review:

• Police Shooting Range – Storage Building
• Public Works – Forestry Building A Street Shop
• Riverside Roundhouse
• Green Square Park
• Riverside – Oak Hills TIF
• Seminole Valley Park
• Ushers Ferry
• House at 1021 5th
• Hydroelectric Dam Building

Like with the University of Iowa recently, it should be interesting to see how FEMA concludes it's evaluation of the Cedar Rapids infrastructure. Last week, the University of Iowa announced findings on some of their infrastructure.

According to the story, "the recovery plan approved by the council will provide an outline for the process, but doesn't finalize anything quite yet." Citizen input will be next, before any final decisions are finalized.

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Cedar Rapids was hit by a flood, but other Cities line up for Stimulus wish list

Did you catch in today's edition of The Wall Street Journal. The Journal features a story, Stimulus brings out city wish list.

By the way, The Gazette reported our local wish list in an article dated: 01/09/09
Library, new bridge on C.R.'s federal wish listIn a normal year, City Hall asks Uncle Sam to find money for five or so local infrastructure projects. This year — with the city in the midst of flood recovery and with every expectation that Congress and the incoming Barack Obama... More >>

Our mayor and council member, Monica Vernon, are currently on a lobbying trip to Washington D.C. with the local Area Chamber of Commerce.

For more on information on a free-market based solution to the economic crisis please read Public Institute Policy Study: Governing by the Founder's Constitution: the Presidency of Warren G. Harding.

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Taxes and Spending: Will all levels of government ever learn?

The firestorm needs to begin. We need to look critically at priorities and spending by all branches of government.

Yesterday, the Board of Supervisors completed the process that led to higher salaries. Today, the Gazette online article titled Linn lawmakers to file supervisor recall bill reflect the mood of many Linn County taxpayers, who are angry over the salaries for the Board of Supervisors.

Spending at the local level needs to be looked at very carefully. Look at our economy and the impact that the Flood of 2008 has had on our local economic engine. Businesses have closed, relocated or are laying off.

Not much is moving very fast in Washington D.C., in regards to flood relief. The Federal monies have strict guidelines and many property owners and businesses are having trouble fitting within the requirements.

Much of the focus in Washington D.C. is not on disaster recovery, but economic stimulus package that is more about pork and less about stimulus for our small businesses and homeowners.

What is going on in Washington with the 111Th Congress?

In a speech at The Heritage Foundation last Thursday, Sen. Jim DeMint (R-SC) unveiled his “American Option” alternative to President Barack Obama’s Trillion Dollar Debt Plan. From DeMint’s speech: Link

We will see future tax increases from Washington D.C., if the Bush tax cuts sunset. Regardless of what your views of our 43Rd President of the United States are or were, a future known tax increase is not good stimulus for our current economic situation.

By the way, you may be interested in the new conservative blog here in the State of Iowa. The new blog has a recent announcement:

HawkeyeReview.com is pleased to introduce our newest contributing
editor: Christian Fong

The Contributing editor has two contributions you may find interesting:

The New Iowa Economy - Part 1: Iowa's Capital-Intensive Economy
The New Iowa Economy - Part 2 Iowa Recessions Lag the General Economy

In the State of Iowa, the discussion turns to a 20 percent or higher increase in the Iowa gas tax for roads and bridge infrastructure. The State of Iowa is looking at expanding taxes and revenue streams for local governments. However, what about comprehensive tax reform and the over reliance on property taxes in our State at all levels of government?

In the City of Cedar Rapids and Linn County, property taxes are expected to raise from any where from 6% to 10% for property owners. The Water rates in Cedar Rapids are expected to increase 14%. Now, we are being asked to approve a 1% LOST, local option sales tax, for the City and County. The Gazette article titled Cedar Rapids will vote March 3 on local-option sales tax and for Linn County coverage.

Where do are current tax dollars go? Have we looked at spending priorities at all levels of government, before raising tax revenues and continuing the path of record government spending?

Finally, the issue of accountability and transparency in our local government. Has the City of Cedar Rapids reduced anything within the budget and spending post-flood or post-economic decline?

Yes, there are priorities that need to be met. Flood mitigation is clearly a high priority. Sadly, that priority wasn't fully met leading up to the Flood of 2008. Other priorities were given higher priority and attention over the past 15 years, since the Flood of 1993.

How high can we take our tax base take in new taxes at this time? During this economic downturn, how smart is it to raise any new taxes?

The State is discussing $50 more for gas per year. The City already wants 14% more for water and other related services. The economy is dropping, which is reducing jobs and income for many throughout our community.

In 2008, our City Budget rose 14.8% to $351.7 million (listed on the City web site as $3351.7 million under overview section), up from $306.2 million in 2007.

Back before the Change in government, our FY6 Budget was at $292 million as approved by our Commission form of government back on March 15, 2005.

Our Governor is taking an across the board reduction in the State of Iowa budget. What is the City Council and County Board of Supervisors looking to do? It appears the solution is raise taxes, fees and assessed values for starters.

We were at $292 million on March 15, 2005 for FY06 in the City of Cedar Rapids. Today, where are we headed? Spending and spending priorities are the problem. We are collecting quite a bit from our tax base and consumers of city utilities and services. On average, we pay $100 more per capita in property taxes than other cities.

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Super Bowl Sunday: Kurt Warner vs. the real Front Page news

The Gazette arrived this morning with the much anticipated 12 page spread on Kurt Warner and Super Bowl 43, but maybe it served as cover for the real front page story by Rick Smith, buried beneath the Special Section?

Online: Breaking News
The Headline: Frustration mounts in flood recovery CEDAR RAPIDS - Temperatures are spiking inside and outside City Hall.

A pastor at a local church commented about it in today's sermon. In the news here is Iowa basketball, Zach Johnson and of course, Kurt Warner, but also the frustration and anxiety over the Flood of 2008 and the future within our community.

It wouldn't be normal not to have some anxiety right now. It's to be expected.

One clear byproduct from the Flood of 2008, is the desire within and outside Cedar Rapids to raise taxes and other revenues. How much will the Flood be used to justify for higher taxes? There was a move pre-flood to increase city and county revenue streams. Cedar Rapids was one of the leaders in the State of Iowa bringing about such discussion and lobbying efforts.

• 1% Local Option Sales Tax
• 8 to 10 cent increase in the State's Gas Tax
• Local Income Surtax
• 10% increase in Residential Property Taxes
• 7% increase in Industrial and 6-7% increase in Commercial Tax
• 14% increase in Water Fees
• Local Impact Fees on new development
• Local Cigarette Tax
• Local Wheel Tax
• Local governments collecting money from non-profits

Cedar Rapids residents call for more flood recovery communication by Phil Harvey -The Gazette writes, CEDAR RAPIDS - Cedar Rapidians want their city rebuilt and built better.

Rick Smith's blog: eye on the island has some other interesting tidbits about the Cedar Rapids government today. From Westdale Mall to Consultants to separate fees for residents vs. non-residents, Rick covers the City Hall beat for The Gazette.

Buttry: Wanted - Pushy leadership for C.R. The Gazette's Steve Buttry, editor opines...
Leaders at all levels are failing Cedar Rapids.We need to get tough. We need to get mean. And we need to do it now.

Among the Federal Government, the State of Iowa, and local taxing authorities, including the Cedar Rapids and Linn County; taxes and increases in other fees appear to be growing and growing in popularity. Of course, we see layoffs and declines in GDP, worse since 1982, also making headlines locally and nationally.

It was interesting to listen to comments from those impacted by the Flood of 2008. For example, with Jumpstart's lead based paint mitigation requirements, there is simply a lack of common sense. The key word often... is a need to get back to Limited Government. There clearly is a role for government, often, it's oversight, but the continued growth of the governmental sector is more than alarming right now... at all levels.

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