Even when we agree, tax issues drag on and on
.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Every great story is based on a conflict. Whether it’s Captain Ahab getting all torqued off at a white whale or the valiant hobbit Frodo trying to return a piece of jewelry without a receipt, somebody has to overcome something.
The endless debate about commercial property taxes could use some of that. It would instantly become more exciting if someone important would stand up and say, “Actually, I think we should raise them a little.”
But no, everybody is on the same side. Everybody. The only way to generate less controversy would be to introduce a piece of legislation declaring that puppies are cute.
When the Legislative Property Tax Study Committee met in the Capitol earlier this month, all the elements of a revolution were at hand. But then, instead of marching out to the street, pitchforks and BlackBerrys held aloft, they adjourned until next time.
OK, understood, that’s the process. It’s essential to gather information and plan ahead. But guess what? Nobody seems to expect a solution from the 2008 Legislature, either. Way too late to think about such a thing in the world of government committees, where three months is barely enough time to arrange for coffee and pastry. Maybe 2009. Or thereabouts.
Des Moines City Manager Rick Clark made a fine presentation against high property taxes, noting that this year’s “resident satisfaction survey” of the city’s residents found property taxes are “the least preferred method to pay for city services.” User fees and sales taxes are the most preferred.
And yet, Clark noted, Des Moines relies on property taxes for 58 percent of its general and debt-service funding. The figure is 30 percent in Omaha, and in Dayton, Ohio, it’s a slender 12 percent.
So where does Dayton get its spending cash? Sixty-two percent comes from an income tax. In Omaha, 35 percent comes from sales taxes.
“I’m not necessarily saying government needs more money,” Clark said later. “Just better funding sources.”
If he had one wish – and if that wish could only be used on city business; let’s be realistic – he might use it to make sure a certain lawsuit turns out in Des Moines’ favor. We don’t know when the courts will hear the suit seeking to put an end to franchise fees, but Clark is imploring the legislative branch to make a pre-emptive strike.
Des Moines tacks a fee on utility bills, and that money accounts for 9 percent of its funding. Take it away and bridges start falling down. Well, maybe not that, but it would certainly be a whack to the city’s knees.
“The fact that the lawsuit’s outcome remains an uncertainty is a cloud over the city,” Clark said. “Legislation (affirming the legality of such fees) would be enormously helpful to us, and not just us; 20-some cities in Iowa use franchise fees.”
Clark listed for the committee 15 things Des Moines has done to reduce expenses, such as cutting staff, raising fees and consolidating programs. Which brings us to another item on his wish list; he wants the Legislature to come up with incentives encouraging cities to cooperate.
Hotel developer Loree Miles brought up a different angle on taxation. In the course of putting together projects in several states, she found a system that she likes better than high property taxes. She would rather pay a fairly high “impact fee” up front in return for reasonable annual taxes. The impact fee can be rolled into her project loan, and she can spread the pain over 25 years.
That didn’t sound like such a great deal to everyone present, but it’s something to consider.
You’d better consider something and act on it soon, was the message from Miles. She has heard developers say they’re walking away from Central Iowa because of the tax load.
But without a fight between good and evil, it can take such a long time to find the resolution.
If this were a classic story brimming with conflict, now would be the moment for something more dramatic than another meeting.
We kick open a door. A bleeding piece of commercial real estate lies on the floor. A note is scrawled on the wall in lipstick: “Stop me before I tax again.”