Iowa City staff explain proposed 1% local option sales tax, outline ballot uses and revenue estimates

Iowa City Assistant City Manager Kirk Lame told the Parks and Recreation Commission that the City Council voted Aug. 5 to place a 1% local option sales tax (LOST) on the Nov. 4 ballot to provide a new revenue source for the city and to diversify funding beyond property taxes.

Lame said LOST is “essentially an additional 1% tax, on sales” and that state law requires ballot language to specify how proceeds will be used. He said the council’s proposed split is 50% for property tax relief, 25% for affordable housing, 10% for public streets, parks and facilities, and 15% for community partnerships. Lame said the city currently projects roughly $8 million to $10 million in annual revenue for Iowa City if only Iowa City adopts the tax; that amount could be higher if neighboring jurisdictions with large retail bases (notably Coralville) also adopt LOST.

The nut graf: LOST would require a council vote to place the measure on the ballot and a majority of voters to approve it; if approved, the earliest enactment date Lame cited is July 1 of the following…