The Ottumwa Courier

November 9, 2012

Eldon loses out on LOST

Eldon mayor: Voters may not have understood ballot language about revenue-sharing measure

Courier Staff Writer

ELDON — Without LOST, Eldon’s mayor fears her community may be “lost” in finding much-needed revenue.

“I am disappointed,” said Mayor Shirley Stacey. “I think we had some uninformed voters. And the ballot [was] somewhat confusing when you turned it over.”

Of all the communities in Wapello County voting this past Tuesday on whether or not to extend the one-cent Local Option Sales Tax, Eldon voters narrowly rejected the measure, according to unofficial results.

The current measure allows for the one-cent sales tax through Dec. 31, 2013. Every other municipality in Wapello County and the unincorporated areas of the county agreed to extend the tax another 10 years.

That means, unless the city calls for another election and the measure passes, effective Jan. 1, 2014, the sales tax on taxable goods in Eldon will drop from 7 to 6 percent. But when people from Eldon go shopping anywhere else in Wapello County, Stacey said, they will pay that extra penny, which goes into a large, countywide pot of money.

“We have to go someplace else [besides Eldon] to buy clothing, appliances, groceries.”

The people of Eldon shopping in Ottumwa pay the extra one cent, which is then shared by every community in the county — except for the residents of Eldon.

The mayor said she doesn’t like the sound of that. Why should they be excluded? She said it’s especially frustrating to see the LOST measure lose by only two votes.

“Some people I spoke to didn’t even flip over the ballot. On 86 ballots, they didn’t vote on the measure at all,” she said.

Wapello County Auditor Kelly Spurgeon said unlike some payments around the county, her office does not distribute the money brought in by the one-cent sales tax.

For guidance, she refers to the Iowa Department of Revenue web page. There is a formula to determine how much each town gets but in general, it works like this: A town will not simply receive “tax collected by merchants in the locality.”

Instead, the local option tax collected within a county is placed in a special distribution fund. The fund is distributed to each local community on the basis of population and property tax levies.

This is not a new tax. The current LOST is generating revenue. It was the renewal that failed, meaning Eldon will stop sharing the revenue at the end of 2013.

“Our town would totally be lost. It’s [more than] $92,000 we get off of this every year,” Stacey said. “Without it, we’d just be in big trouble. Our fire department, our police department, the streets, they’d all be affected. We may have to go to shorter hours at City Hall.”

The money, dropped right into the general fund, is a large amount for the town of 1,000 people. When something crops up unexpectedly, the mayor said, the City Council knows there may be some LOST money coming in.

“Let me give you an example,” Stacey said. “We had a storm sewer collapse [recently], and had to close that [section] of the block. The bid to repair that is $13,000. That money is going to come from the current Local Option Sales Tax. It’s nothing we planned for. But thank goodness we have that Local Option Sales Tax money, because otherwise, where would that money come from?”

People had already paid into LOST for the past 10 years, Stacey said.

“We have an option of having a special election with City Council permission. Then, the county auditor’s office would look ... at March for doing [the special] election. It’s the 1 percent of everything sold in Wapello County, no matter who buys it, and we would share in that.”

Maybe voters just need time to educate themselves, Stacey said. The mayor added she believes once Eldon residents are more informed on the issue, they will likely want a chance to vote again on whether or not they want their piece of the LOST pie.