Des Moines OK'd a $687 million budget Monday night and a tax increase that most council members supported.
The budget passed by a 5-2 vote Monday night with Councilmen Chris Coleman and Joe Gatto dissenting. Supporters said the 12-cent tax property tax increase is necessary to support city staff and services that experienced deep cuts over the past decade, while dissenters feared it would be a step toward steeper tax increases in the future.
It's the first time the city has raised the levy rate in five years. The budget goes into effect July 1.
City officials say the increase is necessary to add 16 positions the city needs, including a human rights equity coordinator, contract inspectors to address blight in the city and an active transportation planner for a total of $1.3 million.
"We have a revenue problem that we need to solve and that's going to take an investment," said City Manager Scott Sanders.
This is a "tread water" budget, said Sanders, but the city is looking for game-changer in terms of revenue sources in the future, one of which could be local option sales tax, he said. A bill that would allow Des Moines to take the one-cent sales tax increase before voters is currently in the Iowa House.
He, along with many other council members, laid part of the blame for the city's struggling revenues on the amount of property in the city that are tax-exempt nonprofits like the Iowa State Fairgrounds, the State Capitol complex, universities, schools and churches. In 2014, 38 percent of Des Moines property was tax-exempt, equivalent to $1.3 billion in value, and that doesn't include government-owned property, a Des Moines Register analysis found.
After Coleman presented information on lower taxes in surrounding cities, Councilman Skip Moore said the tax rates are so much less in the suburbs because, though residents may choose to live beyond city limits, they still travel to Des Moines "to enjoy our amenities."
"I don't see the state helping us out one bit," Moore said. "I’ve said I won’t increase taxes when I was elected seven years ago. But I will vote for them if necessary. I think our backs are against the wall."
Next year's tax rate puts the city close to where it was before the economic recession, City Manger Scott Sanders said. The tax rate was $17.05 in fiscal year 2005. Since then, the city has cut more 300 positions. But with record-breaking construction last year and a growing population, the city is struggling to keep up with an increased workload, he said.
"It’s not fair to continue to look at staff and say, we’re not going to increase the tax rate, but we need to do more with less," said Councilwoman Christine Hensley.
The budget includes $117 million in capital improvements like replacement and repair on the Grand Avenue and Locust Street bridges. About $50 million would be spent on levees and storm water infrastructure to mitigate floodwater.
Funding was also approved for street improvements to East Douglas Avenue, Hubbell Avenue, Indianola Avenue and McKinley Avenue. The capital budget also adds millions for walkability improvements and streetscapes on Sixth Avenue.
Monday night's vote added a much-anticipated active transportation planner position, responsible for working across city departments to coordinate walkable and bikeable infrastructure within city limits.
Daniel Stalcup, a resident on the east side, questioned whether the city needs an active transportation planner when it's already difficult for some to make property tax payments.
"The statement I read in the paper about we badly need this to help illustrate that we are a welcoming community. Seems to me to best illustrate we’re welcoming community is to lower taxes, not raise them," Stalcup said before council.
Jeremy Lewis, executive director of the Des Moines Bicycle Collective, applauded the council's approval of the position.
"I think they're not looking it holistically," Lewis said of those doubting the role the planner would play. "Ultimately the city decided it was important to invest in this the short term because they understand the long-term impacts of this."