ACTION REQUIRED! LOST-TIF

Our efforts to amend the local option sales tax - tax increment financing (LOST-TIF) scheme that passed in the standings bill two years ago are stalled. There are two major issues in LOST-TIF as the law stands currently.  First, a city council can act unilaterally to change the purpose for which the local option sales tax is used even though the original purpose was voted on by the citizens.  Second, the city council can capture the increment of every other sales tax recipient in the county.  Thus, every other city and the county could lose this income.  The law reads as follows:

An eligible city may by ordinance of the city council provide for the use of a designated amount of the increased local sales and services tax revenues collected under this chapter which are attributable to retail establishments in an urban renewal area to fund urban renewal  projects located in the area.  The designated amount may be all or a portion of such increased revenues.

The city of Council Bluffs originated this idea and legislators from Council Bluffs stand in the way of getting any changes made.  There are three live bills that address this issue.  HF 502 represents a compromise that was reached last year to allow for a reverse referendum and to narrow the increment that can be captured to that of the city passing the ordinance.  This bill is in Senate Local Government.  Senator Quirmbach (D-Story) is willing to run the bill if he is assured that Senator Gronstal (D-Pottawattamie) will run it on the floor.  Senator Gronstal told supervisors at their statewide meeting that he will consider the LOST-TIF issue if he hears concerns from his caucus members.  This bill passed the House last year without dissenting vote.

There are two bills on the House side, both in Ways and Means.  SF 461, which passed the Senate last year without dissenting vote, reflects last years compromise and a new bill this year,  HF 2347 ,is a repeal of the LOST-TIF, which passed House Local Government without dissenting vote.  Representative Paul Shomshor (D-Pottawattamie) is the chair of the House Ways and Means committee.  He has assigned the latter bill to a subcommittee made up of himself as chair and, Representative Mike Reasoner (D-Union) and Representative Nick Wagner (R- Linn). 

In order to get any movement on this issue, county officials need to put pressure on Democratic Senators and House Leadership, Representative Pat Murphy (D- Dubuque) and Representative Kevin McCarthy (D-Polk).  In addition, Representative Reasoner is in a position to assist with this issue as a majority member of the subcommittee.  Please contact these legislators and request their assistance in getting a fair hearing on this issue.  In addition, please contact your Republican legislators and ask if they can help in any way.

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