The official canvass of the May 5 local option sales tax election took place on Tuesday. The measure passed in Iowa City by seven votes and failed in Coralville by eight votes. It was also approved in Hills, Lone Tree, Oxford, Shueyville, Solon, Swisher, Tiffin and University Heights; it was also defeated by North Liberty, West Branch and the unincorporated areas of Johnson County.
Here are some lingering questions about what the results mean for the area:
• Question: I thought the tax was a shoo-in in heavily flood-damaged Coralville and in danger in Iowa City. What happened?
Answer: It seems many voters thought the same thing. While some supporters in Coralville might have assumed their vote wasn't needed to approve the measure, anti-tax voters made sure to get out to the polls. The opposite seems to have happened in Iowa City.
• Question: Why do I hear talk about the possibility of re-votes only in the jurisdictions that voted down the tax?
Answer: The legislation allowing for an expedited local option sales tax election on May 5 specified the tax, if approved, has to be in place for at least one year. The Johnson County Board of Supervisors placed a four-year sunset on the tax, but any city can end the tax after the first year elapses. Ending the tax for a city would just take a majority vote of that city's council. If Iowa City, which represents a majority of the county's population, asks for the tax to be extended beyond the four years, then the measure will have to go before the voters again in 2012.
• Question: What happens if Coralville leaders decide to ask Iowa City to put the measure on the ballot for a re-vote in their city?
Answer: Any future local option sales tax won't include the special provisions for the May 5 election. That means Coralville voters wouldn't be able to decide for their city alone. Instead, because any contiguous areas that didn't pass the tax would be lumped into one jurisdiction, Coralville and North Liberty would be lumped together.
• Question: Shouldn't the unincorporated areas be lumped in with them as well?
Answer: In this case, the unincorporated areas would be treated as a separate jurisdiction. If they voted yes, the county could stand to collect as much as $4 million annually to use on property tax relief and road improvements -- money that largely would come from taxes collected in Iowa City and Coralville. Given the large margin by which rural voters rejected the measure on May 5, however, it's hard to imagine they would approve the tax in a later election.
• Question: Why can't Iowa City and Coralville just keep all the tax money collected in their city limits?
Answer: Local option sales tax money is distributed throughout the county by a formula that's based on 75 percent population and 25 percent property tax assessment. That pulls money from the areas of the county with a lot of retail and distributes it throughout the other jurisdictions.
For the May 5 election, state legislators temporarily changed the way the state computes the property tax assessment portion of the formula -- changing it so current retail centers, like Coralville, could keep more of the money collected in their city limits. But that change won't be part of any future election.
• Question: What does that mean if Coralville and North Liberty voters were to approve the local option sales tax in a later election?
Answer: That means Coralville would bleed more of its tax revenue to the other cities than it would have if its voters had approved the tax on May 5.
• Question: What if Coralville wants to put the measure on the ballot but Iowa City says no?
Answer: It's hard to imagine Iowa City would say no. If Coralville approves the tax, the distribution formula means that Iowa City gets even more tax revenue. If all the jurisdictions were to approve the tax, estimates show that Iowa City could get an extra $175,000 a year. If Coralville and North Liberty were to approve the tax and not the unincorporated areas of the county, then Iowa City could bring in much more.
• Question: Is it right for Coralville to ask for a re-vote after voters rejected the measure?
Answer: We still think this sales tax presents the best way for Iowa City and Coralville to afford the flood recovery efforts they've proposed. If such a tax isn't collected in Coralville -- and if its proceeds aren't distributed to other juridictions -- then Coralville and Iowa City residents are likely to see a rise in their property taxes and utility rates.
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