Early voting begun local option sales tax renewal for Charles City, rural Floyd County
By Bob Steenson, [email protected]
Absentee voting has begun for two special elections to be held Tuesday, March 1, to decide whether to continue a local option sales tax in Charles City and in the rural areas of Floyd County.
The 1% tax on sales and services has been in effect since 1997 in Charles City and since 1998 in rural Floyd County and has been renewed twice in each jurisdiction, the last time for 10 years each.
The local option sales tax (LOST) expires Dec. 31 this year for Charles City and rural Floyd County, and city and county officials are asking whether voters want to keep the tax in place for another 10 years, to Dec. 31, 2032.
The question is the only issue on the city ballot and on the rural ballot, and requires a simple “yes” or “no” vote.
Charles City residents and residents of the incorporated areas of the county can vote in person now at the Floyd County Auditor’s Office, Mondays through Fridays from 8 a.m. to 4:30 p.m.
Extended voting time will be in effect until 5 p.m. on Friday, Feb. 25, and Monday, Feb. 28, according to the Auditor’s Office.
On the special election day, March 1, polls will be open from 7 a.m. to 8 p.m.
Although elected officials and public employees can’t lobby for voters to vote one way or another, city and county officials all point out that the tax has been a significant source of revenue used to provide services each year.
City Administrator Steve Diers has called the LOST “a critical part of our city operations,” noting that the city has completed more than $20 million in street and road projects using money from the tax since 2004 — projects that would have had to have been paid through some other source or not done at all without the LOST revenue.
According to information from the city, in the last 10 years the LOST fund has collected $7.8 million for the city that has been leveraged into $12.2 million of city streets and road projects.
Diers also called the tax a very fair tax, because it is charged to anyone who buys goods in the community, whether they live here or are visiting, and is used to build and maintain the streets that are used by residents and visitors.
For Floyd County, the money is a significant part of the Secondary Roads Department funds. In fiscal year 2020-21, Floyd County received almost $730,000 in LOST revenue. For the past 10 fiscal years the county has received more than $6.5 million that has all gone toward secondary road work.
The former Floyd County engineer has said that losing the LOST revenue would mean less rock applied to rural gravel roads and possibly less time spent by road crews on road maintenance.
All the public officials emphasize that this is not a new tax, but a continuation of a tax that has been in effect for more than 20 years and that is collected in almost every other county and community in the state.
For the county, there is no change in what the LOST money would be used for.
The wording on the rural county ballot says the funds will be used “100% for funding Secondary Roads, including rock, bridges and culvert repair and/or replacement and construction projects in the unincorporated county.”
There is a change in the wording for the city proposed LOST renewal, allowing up to 10% of the funds to be used for “funding public safety projects.”
For the rest of the city LOST revenue, “not less than 90%” would go for street and road construction and repair.
Diers suggested the City Council consider the change, pointing out that the city has about $160,000 in additional expenses for the Charles City Police Department coming in the next fiscal year, because of pay and benefits increases the City Council approved to help attract and retain officers to the force, and in the next year of the AMR contract the city’s responsibility will be $100,000 to help pay for ambulance services.
The Charles City Fire Department also has more than $800,000 in building and fire truck equipment needs over the next five years.
Some council members expressed concern over changing the language, but ultimately passed the language unanimously.
The local option sales tax is that extra penny tax that is added to the state’s 6% to bring it up to the 7% total sales tax paid almost everywhere in the state.
The cities of Colwell, Floyd, Greene, Marble Rock, Nashua, Nora Springs, Rockford, Roseville and Rudd also have the 1% local option sales tax, meaning it is currently in place throughout Floyd County, although those cities did not set an end date for their LOST tax, so it does not have to be renewed every 10 years as it does in Charles City and the rural parts of the county.
Proponents of the LOST say that since the vast majority of spending on goods and services occurs in the incorporated cities of the county, even if the rural vote failed, rural residents would still have to pay the extra penny tax if they shop in communities where it is in effect, but the rural area would lose that revenue.
The county also gets far more in its share of the LOST revenue than rural residents pay, because of the way the tax is distributed.
Sales of goods and services in Charles City help subsidize the governments of the other cities in the county and rural areas, because Charles City receives back only about half of the amount collected in the city in the LOST tax. Still, the money it does get is a significant amount of the city’s budget, proponents say.