The Iowa City Area Chamber of Commerce endorses the 1 Percent Local Option Sales tax for flood recovery, slated for a vote in a May 5 referendum.
Iowa City Area Chamber President & CEO Nancy Quellhorst said cities anticipate the recession will result in reduced tax revenue for several years. “If recovery is not funded by this sales tax, projects will be funded by increased property taxes, which already extraordinarily challenge local businesses,” she said.
More than 250 businesses suffered direct loss in the 2008 flood. Countless others sustained financial harm due to business interruption. Revenue from the one percent sales will be used by the cities of Coralville and Iowa City exclusively for flood remediation and infrastructure repairs.
A significant number of 2008 flood-affected businesses flooded in prior years and do not have the financial resources to endure another natural disaster. Failed businesses would result in vacant properties, reduced property values and a declining tax base. Mitigating this risk will encourage renewed investment in central trade areas.
“Mitigating the risk of future flooding is critical to the local economy,” Quellhorst said. Among projects to be financed by this tax are the elevation of Dubuque Street and reconstruction of Park Road Bridge. Dubuque Street, the primary artery to our central trade area downtown, was closed for 32 days in the 2008 flood. The Park Road Bridge configuration significantly slowed water flow, which caused increased flooding in Coralville.
Infrastructure improvements are critical to public safety and will leverage state and federal funds, which require local investment as a prerequisite.
“It is highly unusual for the Iowa City Area Chamber of Commerce to support a tax increase, particularly when local businesses are challenged by exceptionally high property taxes and a stressed economy,” Quellhorst said. “We are deviating from standard practice to support this limited duration tax due to extraordinary circumstances and the urgent need for mitigation.”
The Iowa City Area Chamber of Commerce is committed to monitoring the application of these funds and resulting improvements.
“The cities of Coralville and Iowa City have significantly reduced budgets and continue to identify reductions to avoid deficits due to the recession,” Quellhorst said. “The Coralville General Fund Budget is $14 million and $54 million of improvements are necessary. Iowa City has cut $3.5 million to date and further reductions will be identified this week.”