by Deborah D. Thornton
On
May 5, Linn County fully implemented the Local Option Sales and Services
Tax (LOST). Under Senate File 44, signed by Governor Chet Culver in
February, counties designated federal disaster areas were able to hold a
special election to try to implement the tax, presumably, but not
exclusively, for disaster recovery. The only two counties with no LOST
were Linn (Cedar Rapids) and Johnson (Iowa City). All other counties in
Iowa already have the LOST in some portion of the county. The
legislation only required 30 days notice to voters, and allowed for two
potential voting dates: March 3 or May 5. The tax was proposed as a
1-cent increase and is passed by individual areas, so that one town
could pass the tax, both collecting and receiving the money – and
another could not, and would not receive any.[1]
Linn
County chose to vote almost immediately, on March 3, with not all areas
passing the tax. Most notably, it failed in the city of Marion, 2,044
to 2,227.[2]
The Cedar Rapids City Council immediately set up a revote for May 5.
Reasons cited were that voters were confused about the tax’s use.[3]
On May 5 these towns did pass the tax, as their elected officials
wanted. While the revote was a legal option, it was not specifically
outlined in SF44.
Both
Linn and Johnson Counties were the last two counties to pass the School
Infrastructure Local Option tax (SILO), in 2007. This tax is similar to
the LOST, except specifically for the building of local schools. Voters
passed the tax increase, which had previously been turned down, because
the Legislature promised that they would get to keep all the collected
taxes for the first five years, instead of sharing with the other
counties. In Iowa, those counties that collect more than their “fair
share” of local SILO taxes – because they have stronger retail centers –
generally have to share money with counties that collect less. This is
based on a complex formula, factoring in the dates of implementation and
county population. Because both counties are strong retail centers, the
ability to keep all of the money collected was enough of a bribe to
induce the taxpaying workers to vote “Yes.” Key to the implementation
of the SILO tax is that it was a “local” tax, voted on by “local”
citizens to fund their schools, with a sunset date of generally 10
years.[4]
Unfortunately, less than a year after Linn and Johnson Counties were
bribed into passing the SILO tax, the Iowa Legislature voted to make it
a permanent statewide tax, with no protection from being used for other
purposes. Linn and Johnson still get to keep their extra money for the
rest of the five-year period. Those who argue that the SILO is not
permanent do have a point: the official legislation provides for a
sunset clause. This means the SILO would be reconsidered by the state
in the year 2029.[5]
This provision reminds one of the song from 1969 by Zager and Evans, a
one-hit wonder duo from Nebraska,
“In the year 2525, if man
is still alive, if woman can survive they may find….”[6]
By
2029 we may find that the SILO is now permanent and that whether or not
the working, taxpaying citizens want or need the tax is irrelevant.
Even if it is being used for schools, the State is in charge. This
leads to similar thoughts about the LOST.
On
May 5, during the revote on the LOST in Linn County, Center Point,
Hiawatha, Marion, Robins, and Walford passed the tax increase.[7]
Voters were convinced that since everyone else had the tax, they needed
it too in order to get their fair share of the income generated. In
Johnson County, most of the towns passed the tax increase, including
Iowa City. The tax was defeated by substantial margins in the
unincorporated area of Johnson County (36-64 percent) and the town of
North Liberty (39-61 percent). In Iowa City a very slim majority of
3,641 or 50.02 percent “Yes” votes passed the tax to 3,634 or 49.92
percent “No” votes. The “Yes” votes were seven greater than the “No”
votes. In Coralville the tax failed by a similar margin, with eight
more “No” votes.[8]
This author supports the principle that a majority is 50 percent, plus
one vote. If a majority of the voters vote “Yes” it should stand. If
50 percent plus one vote defeat an issue, the same principle should
apply. Therefore, if the majority vote “No” it too should stand. In
Johnson County each result should stand as voted. The voter turnout,
while not large, was comparable to previous local option elections, at
15 percent of the total registered voters compared to 14 percent for the
SILO turnout in 2007.
The
issue of whether or not 15 percent of the voters actually voting make a
valid result is not addressed by the LOST legislation. In the United
States we have no legal requirement to vote in an election in which we
are not interested, do not hold a strong opinion, or do not feel well
informed. However, the principle of living with an election result does
come into consideration. We vote for President, Governor, and local
officials – and live with the result until the next regularly scheduled
vote. In extreme cases the U.S. Supreme Court makes the final
decision. We do not vote, and revote, and revote until we reach some
“correct” result. This is a hallmark of the American democratic
process.
Both
supporters and opponents of the tax increase in Johnson County are still
considering their options for dealing with the May 5 results. There may
be not only a recount, but also a request for a “revote.” In this case,
the revote would fall under the normal LOST provisions, with a
substantial lead-time before the vote and a contiguous area rule in
place. Interestingly enough the regular LOST provisions allow for a
vote called by petition of the voters, not just by the call of the City
Councils and County Supervisors. A revote on the “No” results could
result in a citizen petition for a revote on the “Yes” results as well,
with a repeal of the tax after a minimum of only 1 year.[9]
This
presents an interesting situation. According to the song,
“In
the year 3535 ain't gonna need to tell the truth, tell no lies
Everything you think, do and say is in the pill you took today.”[10]
And as demonstrated in Linn County, if you don’t think, do, and say as
the government says you should, you’ll vote again until you do. Of your
own free will, of course. Let’s hope elected officials in Johnson
County don’t follow the same path, or the year 3535 may be closer than
we think.
Deborah D. Thornton is a Research Analyst at Public Interest Institute.
The views expressed herein are those of the author and not necessarily
those of Public Interest Institute or Tax Education Foundation. They
are brought to you in the interest of a better-informed citizenry.
