Voters asked to decide on renewal of Local Option Sales Tax March 5
by Lissa Blake
Voters in Allamakee County are encouraged to head to the polls Tuesday, March 5, to vote on whether or not to renew the Local Option Sales and Service Tax (LOST) which is expiring in several areas of the county the end of this year.
Established in 1985, the one-percent tax has since been adopted in most cities and unincorporated areas in Iowa. Several years ago, the state was able to expand this one-percent tax to out-of-state retailers who make deliveries to areas of Iowa where LOST is in place. Last fiscal year, cities and unincorporated areas in Iowa received more than $600 million in proceeds collected through the measure. These funds are typically used to help relieve the burden on county and city general funds and are used for items like roads, streets, water and sewer systems and public safety vehicle and equipment acquisitions.
HOW IT WORKS
When the public votes on whether or not to impose or extend the local option one-percent sales tax, it stipulates whether or not to impose an end date, also referred to as when the measure will “sunset,” as well as indicating the specific uses for the revenue.
In Allamakee County, the measure was last voted on 10 years ago, and Lansing and Harpers Ferry were the only two jurisdictions to approve it without a sunset date at that time. Therefore, residents within those two towns will not be involved in the March 5 election, but rural residents of each still will be as part of the county’s unincorporated area.
March 5, voters in Waukon, New Albin, Postville, Waterville and the unincorporated portions of Allamakee County will be asked to extend the measure currently in place. The communities of Waukon, Waterville and Postville will be asking voters to renew that sales tax once again, but this time without an ending date. The town of New Albin and the unincorporated areas of Allamakee County will be asked to renew the sales tax for another 10-year period.
WAUKON
In fiscal year 2023, the City of Waukon took in $509,136 in local option sales tax. According to City Manager Gary Boden, since Waukon’s LOST referendum passed 10 years ago, most of the funds have been used for street reconstruction and maintenance.
On this year’s ballot the language will add “public safety vehicle and equipment acquisition” to the designated purposes. It will not include a sunset date.
“Right now we’re spending about $85,000 a year out of our general fund for police cars, fire trucks and ambulances,” said Boden.
Boden explained adding the new language will help with some of the city’s “big capital expenses,” such as fire trucks. He said the city’s share of a new fire truck will be $350,000 this year.
“Through LOST, taxing will not increase, we will just change the way we allocate some of it,” he said.
WATERVILLE
The City of Waterville received $12,262 in LOST revenue last year. The Waterville measure maintains the tax’s uses at 40 percent for general fund purposes, 40 percent for public safety and street repairs and 20 percent for sewer repairs, replacement and improvement. It will “be effective January 1, 2025 and continuing in perpetuity,” meaning there is no end date for the measure.
POSTVILLE
Last year the City of Postville received $363,306 in LOST revenue. The new measure specifies that 50 percent of the proceeds going forward will be spent on public safety and the other 50 percent on street repairs, replacement and improvement, with no sunset date.
NEW ALBIN
Unlike other jurisdictions in Allamakee County, in New Albin, 100 percent of LOST proceeds is allocated to the general fund for property tax relief. During the Fiscal Year 2023, for example, New Albin received more than $58,490 in LOST revenue, all of which lessens property taxes in that community.
The current ballot includes the stipulation that the one-percent tax will sunset in 10 years in New Albin, December 31, 2034.
UNINCORPORATED AREAS
According to Allamakee County Supervisor Dennis Keatley, the unincorporated areas of Allamakee County received $1,081,628 in LOST revenue in calendar year 2023. The distribution of these funds going forward will remain at 40 percent for township financial responsibilities, 30 percent for rural services and 30 percent for construction and/or repair of secondary roads. The county measure is also scheduled to sunset December 31, 2034.
PROPERTY TAX RELIEF
While most jurisdictions do not designate property tax relief as an approved use of the one-percent tax, the LOST revenue essentially reduces the amount of property tax/general fund expenditures for infrastructure and emergency services.
“The County’s local option sales taxes received continue to be a significant portion of County revenues and account, in part, for property tax levy rates lower than would otherwise be possible,” explained Allamakee County Auditor Denise Beyer.
Election poll locations will be open from 7 a.m. to 8 p.m. Tuesday, March 5. Polling sites and other election information can be found in the Public Notices on Page 33 of the Wednesday, February 21, 2024 edition of The Standard.
