Iowa needs to eliminate it's over reliance on Property Taxes

How many studies will it take, until we can finally see Tax Reform in the State of Iowa?

Impact Fees appear to be a topic on the horizon...

Will the Flood of 2008, ironically get the movement towards Impact Fees out ahead of Tax Reform in Iowa?

The subject has been popular the past 12 months with Cedar Rapids' City Manger. Will the subject be pushed forward with a special session of the Iowa Legislature this fall?

Will the State of Iowa eliminate it's over reliance on Property Taxes anytime soon? Will the impact of the Flood of 2008 open the door to new taxes and fees for local municipalities?

peace

The New Face for the push of Impact Fees for the State of Iowa?

We saw the topic of Impact Fees for the State of Iowa crop up in Des Moines earlier this year from a messenger from the City of Cedar Rapids back during the 2008 Legislature Session.

How much will lobbying impact advisory boards suggestions for solutions on the impact of the Floods of 2008?

Andy Peterson's blog at WMT600 commented about Jim Prosser's position on impact fees:

"Why are Jim Prosser
and the CR City
Council suddenly a big fan of "user fees" - a pet license, a fee
for your
street to be re-paved, a fee for the police to call a tow truck if you
get
into an accident, and so on, at the same time property tax revenues are
going up? Because you and I aren't likely to notice them or get up in arms
about them like we would a bigger tax increase, that's why!"

Another new fee on the landscape in 2008 is the Basic Fire Inspection and Life Safety Report fee implemented by the City Manager for Cedar Rapids. As the Code Enforcement Division - Fire Inspections points out in the letter to business owners: "No invoice will be sent regarding this $20.00 fee. Please pay using the top portion of the inspection sheet that the Fire Crews leave with you."

Earlier in the letter, the following explanation was given: "The fee is designed to give the department a minimal off-set to the time and expense put forth by fire crews and apparatus." But, don't forget, the fire crews have been providing this function for years as a part of fire crews normal time and if a "call" arises during the inspection, they immediately stop the inspection and get back to the primary function of the Fire Department. So, what do commercial and industrial property taxes to the City of Cedar Rapids pay for?

So, will the Flood of 2008 open the door for new discussions for the justification of Impact Fees during a special session in the Fall of 2008?

"Do we have needs? Yes," Prosser said. "Do we have a clear path to get that
money? No." "Casey Drew, the city's financial director, said the city also would
seek the ability from the Iowa Legislature to raise money in other ways in
addition to property taxes."

It's up to Governor Chet Culver and the Democrat controlled Iowa Legislature to decide, whether there will be a special session, but all signs point to one. All signs point to the push for Impact Fees, as well.

Look at the current impact gas prices have had on the gas tax receipts. Further, they are a hidden tax that can have a very negative impact on economic development and the ability for a rural state, like Iowa, to compete with other markets around the country.

One of the many consultants that the City of Cedar Rapids uses had this to say...

Levy encouraged the council to continue to hunt for "every alternative" source
of revenue to cover the city's upcoming cash-flow needs, per The Gazette story.

One issue I would love to see the State of Iowa take up very soon is the issue of comprehensive tax reform. Iowa's over reliance on property taxes needs to be reformed, since we have had plenty of study. Adding impact fees, without a comprehensive tax reform could have a negative impact on Cedar Rapids and our State.

A local option sales tax can be taken to the voters to aid with the infrastructure issues impacting the City of Cedar Rapids. The City of Cedar Rapids presently has no local sales tax.

peace

Checks and Balances: Impact from the Flood of '08

Are Impact Fees just around the corner in our State? Will the impact of the Flood of 2008 play a role in opening the door? Will impact of the flood, lobbying by our city and a special session of our State's Legislature this fall, all come together and lead to the legalization of impact fees in the State of Iowa?

We need a comprehensive overall of our State's tax system. The State of Iowa is over 150 years old and much of its infrastructure and government needs to be revisited and improved.

Today's headline in The Gazette, written by Rick Smith, "C.R. to request state's help" is a revisit to our City Manger's lobbying efforts this spring in Des Moines for "options for diversification" in local tax and revenue authority. Without the Flood of '08, the city was pushing for authority to raise money other than through property taxes.

There is no question. The State of Iowa relies too much on property taxes.

Locally, taxpayers should visit with our City Council, neighbors and community leaders to suggest a 1% local option tax for the City. We should have a discussion and strongly consider use of a local sales tax in flood recovery and improves to our infrastructure. Look at city like Sioux Falls. Sioux Falls uses a sales tax for both operations and infrastructure.

However, our State needs to be careful, not to jump on the Impact Fee bandwagon. Economic development and our ability to compete with other cities and states could be greatly impacted.

peace