After failing to pass a 1% local option sales tax (LOST) in March, voters in five Polk County Des Moines suburbs approved it in an August 6 special election. Bondurant, Clive, Grimes, Johnson and Urbandale are now aligned with Des Moines and six other Polk County cities subject to the LOST.
Three previous attempts to pass LOST measures in the five municipalities listed above had failed since 1996, most recently in March 2018. According to the Des Moines Register, 7,874 people voted, passing the measure by as much as an 80% majority in one city, Bondurant. The smallest percentage of votes cast in favor of the LOST was 65% in Urbandale.
“We certainly aren't in favor of LOST because at best it is a tax shift and at worst, it is simply a tax increase,” said Chris Ingstad, Iowans for Tax Relief. “Ultimately we have stayed out of the actual LOST votes as we tend to focus on statewide issues and have found that it is very tough to win when we do dive into a local issue. “
The monies collected from the tax initiative will be added to the state’s current combined state and local sales tax rate of 6.82%, according to statistics compiled the Washington-based think tank The Tax Foundation. Prior to the passage of LOST, the Tax Foundation ranked Iowa 16th on its list of state and local sales tax burdens, with Louisiana (10.02%) first and Alaska (1.76%) last, according to a 2018 analysis.
Revenues from the additional sales tax, which will begin collections on Jan. 1, 2020, are estimated to generate $13.4 million in tax revenue: $866,000 for Bondurant; $1.7 million for Clive; $1.6 million for Grimes; $3.25 million for Johnstone; and $5.3 million for Urbandale. The municipalities intend to use the increased tax revenues for a variety of purposes, including library additions, infrastructure improvements and “quality of life projects.”
Currently, 97 of Iowa’s 99 counties impose LOST on consumers. By state law, counties must use a portion of the revenues generated for property tax relief. Des Moines, for example, granted property owners relief totaling 60 cents or an approximate savings of $47 per year on a house assessed at $150,000.
The previous LOST passed in March is estimated to generate 48.4 million, which will be divided among the following Polk County municipalities: Des Moines; Alleman; Altoona; Pleasant Hill; West Des Moines; and Windsor Heights.