By Casey Cook / Guest Opinion
At the CBJ’s city managers’ forum held recently in Cedar Rapids, Iowa City Manager Tom Markus noted that changes in property tax laws impacting commercial property and apartments will cost Iowa City $50 million over the next 10 years. The state of Iowa has agreed to back fill about $14 million of that, leaving us with a deficit of only $36 million.
Tellingly, not one of the six managers on that panel believed that backfill would actually last. As evidence, they pointed to a similar initiative by the state to abolish machinery and equipment taxes in the early 1990s, on the promise that the state would help offset that cost. The part where the state offset the cost never happened.
So what will Iowa City do when facing a $36 million to $50 million deficit over the next 10 years? Well, it can cut expenses. But what are they likely to cut – basic services like water, sanitary sewer, road maintenance, police and fire protection? Perhaps, but only as a last resort. Alternatively, do we cut the Summer of the Arts, or funding for the library, the Senior Center or the Englert? We could also cut the multitude of human services that we so generously support. Maybe we cut back on parks and trail development or maintenance.
In other words, are we willing to cut the quality-of-life benefits that we all treasure? It is these programs that are most vulnerable, and their survival depends on our ability to raise revenues proactively.
I would caution those city council candidates who have characterized themselves as “progressives.” We are not looking for solutions from the turn of the last century. While the process is informative, the problems have changed. A progressive looks forward. A progressive would weigh the preservation of three severely compromised “cottages” against $2 million in tax revenues should that same land be developed. That $2 million can subsidize all of those quality of life benefits I alluded to. Likewise, a progressive would not be concerned with the shadow of a new high rise if it meant cutting funds to the library.
Progressives are concerned about sustainability and seek to aggressively expand our trail and greenway system, but of equal concern is how to pay for it. Progressives are concerned about incorporating affordable housing into new developments without undermining the financial feasibility of the project.
Tax increment financing has been vilified by our local “progressives,” despite the fact that it is the primary competitive tool we have to foster the kind of development that pays the bills. For every dollar we forgo – that isn’t the same as spending it – we reap the benefits of the investment many times over. Holding back on TIF credits doesn’t penalize the developer, as they can go anywhere. Instead, it is the landowners that suffer – landowners like United Action for Youth, New Pioneer Co-op, the Unitarian Universalist Society and the Community Mental Health Center. They are also the ones that benefit from TIF and the development it makes possible.
I will be voting for progressives in the next city election and they include Tim Conroy, Rick Dobyns, Michelle Payne and Scott McDonough. They understand these issues and know how to apply a vision that can actually work.
Casey Cook is the managing partner at Cook Appraisal. He is co-founder of the Friends of the Iowa River Scenic Trail and currently serves on the board of directors for the Community Foundation of Johnson County.