Cedar Rapids, Iowa residents go to the polls on March 6th to decide on whether or not to extend for 10-years a temporary 1% sales tax to pay for a $375 million flood protection plan. From a purely good governance perspective, there are serious concerns with proposal ranging from poor priorities regarding current spending, an ill-defined flood protection plan, and that the current tax is not scheduled to expire for another two and a half years.
Don’t feel bad if this is all coming as news to you. Supporters of the tax extension planned a “low-key” operation in the hopes that less information in the public sphere would lead to better results than last year, when voters said NO to a similar proposal.
The current tax was set in place in 2009 to help rebuild from the terrible flood damage suffered in 2008. As approved the measure read;
Ten percent (10%) for property tax relief; 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.
Unfortunately, according to groups like We Can Do Better, there are serious concerns over fund mismanagement and misappropriation of existing revenues. Since the measure passed, Cedar Rapids has spent $130 million on a hotel and convention center complex, $8 million on an outdoor amphitheater and $50 million on a new library. It comes down to priorities. If flood protection and rehabbing the damage from the 2008 flood are a true priority then such activities should come before expensive indulgences like a $130 million convention center.
A 10-year extension of the local option sales tax would cost Cedar Rapids’ households over $3,000. This is on top of $2,500 per household already spent since 2009 on the aforementioned side projects. Moreover, the existing tax was designed to be temporary. The March 6th vote would extend a five-year tax to fifteen years in total. The existing levy does not expire until mid-2014. No doubt strong memories still exist from the 2008 flood. However, supporters of the tax extension think residents in 2024 should still be paying for the damage done 16 years prior.
As to the plan itself, the city of Cedar Rapids’ preferred plan projects costs of $375 million ($200 million for east-side protection, $175 million for west-side protection). The Army Corps of Engineers approved plan covers parts of the east-side at a cost of $104 million with a 65/35 federal to local cost share. For those math majors out there, that means a cost difference to local taxpayers of $339 million between what the Army Corps recommends and what the city is pursuing. If the Corps goes along with the preferred plan for the east-side the cost to local taxpayers would only be $310 million. Before launching into a 10-year extension more questions need to be asked of city leaders if they have fully explored both the existing Corps plans for the east-side and what discussions have been had with federal officials to develop a strategy for the west-side of the river.
NTU is not so callous that we oppose local efforts to rebuild after major events. But what is being asked here is not reasonable. Voters are being asked to extend a tax that is not set to expire any time soon for an undefined $375 million plan. All the while serious concerns surround current city expenditures on redevelopment projects. Cedar Rapids needs to think carefully if such a long term commitment is truly necessary at this time.