‘I made a mistake’

Kinser: 78%, not 80%, targeted for property tax relief on Aug. 1 vote

At recent city council and voter information meetings, city staff have been promoting 80 percent of local option sales tax revenue will be applied to residents’ property tax relief if a Aug. 1 special election on re-allocation of local option sales tax revenue passes.

The actual figure, however, is 78 percent, said City Administrator Jessica Kinser in an interview Wednesday with the Times-Republican.

Twenty-two percent of funds would be applied to any lawful use.

The current allocation of LOST funds is 75 percent tax relief, 5 percent any lawful use and 20 percent for street sewers.

Kinser said the city council voted in March to set the proposed re-allocation at 78 percent, and that was the figure used in a sample ballot published by the Marshall County Auditor’s Office in the July 24 T-R.

The purpose of the sample ballot was to alert city voters to the Aug. 1 special election.

The T-R brought the 2 percent discrepancy to Kinser’s attention earlier this week.

“I caught this (discrepancy) over the weekend, and the good news is the ballot language is correct and is what the council approved,” said Kinser in a July 25 email. “The bad news is I made a mistake and didn’t confirm before our presentations or before a mailing is to be in everyone’s (city residents) mailboxes on Thursday.”

“I had it in my mind it was 80 percent,” said Kinser in the interview with the T-R. “The mistake is mine.”

The 80 percent allotment was used during “Budgeting 101” public information forums held June 21, June 28, and July 17, held to educate voters on the reasons for allocating LOST dollars. The sessions were conducted by Kinser and Marshalltown Finance Director Diana Steiner.

Kinser told the T-R that if the measure passes, the council, if so inclined, can take 2 percent from the amount allocated for “any lawful purpose” and apply it to property tax relief.

That would increase the 78 percent to 80 percent, and reduce the allotment to any lawful purpose to 20 percent.

Changing property tax relief to 5 percent results in the reduction of property taxes by another $170,000 or 56 cents per $1,000 taxable value. On a home assessed at $100,000, this is a $32 annual savings, according to city promotional material.

Corrective measures

Kinser said the 78/22 split will be used at the final Budgeting 101 session, 6 p.m. tonight at the library.

Councilors also will be prepared should the topic come up at the next “Coffee with Council,” at 7:30 a.m. this Friday in the back room of The Brew House, 4 W. Boone St.

Kinser said the city would be placing an ad Friday in the T-R, and she was planning to write an email to the city’s press mailing list, too.

Mayoral and councilor reactions

Mayor Jim Lowrance said Wednesday the mistake “was regrettable.”

However, he is confident residents will understand Kinser “made an honest mistake.”

Additionally, he does not want residents to vote no because of it or not vote.

“I am more concerned about voters thinking this is new tax, which it is not,” he said. “Regardless if the Aug. 1 special election is successful or not … on Aug. 2 residents will continue to pay 7 percent on purchases and only 7 percent.”

At-Large Councilor Bethany Wirin was also understanding.

“Mistakes happen,” she said. “Residents need to understand this was an honest mistake and if the measure passes they will still see property tax relief.”

Fourth ward councilor Al Hoop said he was aware of the mistake.

“I voted for 80 percent initially,” he said.

Hoop said residents he has talked with are supportive of the re-allocation, since it will result in property tax relief.

What is local option sales tax?

LOST is a 1 percent tax a majority of Marshalltown voters approved in a 2000 special election. All revenue — an estimated $3 million annually — generated from it goes into the city’s general fund. In transactions where a sales tax is applied, the 1 percent is added to the 6 percent Iowa state sales tax, making the total 7 percent. A number of Central Iowa communities also have a 1 percent LOST.

How much revenue does LOST generate?

2015: $3,126,763

2016: $3,599,309

2017: $4,338,071

2018: $3,400,000 estimate, according to Steiner. The reduction of more than $900,000 is result of absence of Alliant Energy’s Marshalltown Generating Station construction workers. During peak construction this year, hundreds of construction workers were spending thousands of dollars daily in retail purchases, which contributed to 2016 and 2017 revenue spikes.

Why change current formula?

More local option sales tax in the general fund means the city will keep services and fees as is. The additional LOST dollars for any lawful purpose would help support services paid for from the general fund, such as fire department, library, parks and recreation and police department services mostly funded by property taxes.

How will city continue to improve streets and storm sewers?

Marshalltown has been spending more than $2 million on street improvements in recent years and nearly $1 million a year for storm-water projects. Both cost more than LOST is producing, so new payment methods are used.

What if special election fails?

Kinser said the council will discuss making fee adjustments, adding new fees, or reducing services at the Aug. 14 council meeting — the next regularly scheduled meeting.

Kinser said the Iowa Code requires LOST re-allocation be decided upon by voters in the jurisdiction.

The city will pay the Marshall County Auditor’s office for all Aug. 1 special election costs.

Marshalltown is divided into four voting precincts, with respective polling places at:

• Ward 1: Marshalltown Public Library

• Ward 2: Malloy Hall, Iowa Veterans Home.

• Ward 3: Fisher Community Center.

• Ward 4: First Baptist Church.

Polls open at 7 a.m. and close 8 p.m.

For more information, contact Steiner via email at dsteiner@ci.marshalltown.ia.us, or Kinser via email at jkinser@marshalltown.ia.us, or 641-754-5700.