An additional one-cent sales tax will start showing up Monday on shoppers' receipts in Des Moines and several surrounding communities. Half of the revenue from the local option sales tax passed by voters in March is earmarked to lower property tax rates.
The measure is expected to bring in $48.4 million in revenue in the newly participating communities across the metro. The Des Moines City Council accounted for its portion of that money in its next budget by lowering the property tax rate by 60 cents. Much of the remaining money will be spent on public safety, rebuilding streets, improving flood control and demolishing abandoned homes, which can depress neighborhood property values.
"By simply removing that negative aspect, the rest of the neighborhood can breathe a sigh of relief, if you will, and just feel that much more secure even in an investment they've made in their homes," said City Manager Scott Sanders.
The local option sales tax applies to most products and services, but several essential items such as groceries, gasoline and prescription drugs are exempt.
Nearly all other cities and counties in the state already charge the local sales tax. It was never approved in the Des Moines area in the past, Sanders said, because adjacent communities all had to pass the tax at the same time and the proposal was unable to pass throughout the metro. That requirement was recently removed by the state legislature and so more cities are now passing the tax one-at-a-time.
The penny tax increase was also approved in Altoona, Alleman, Pleasant Hill, West Des Moines and Windsor Heights. Some others, including Clive and Johnston, will put the local sales tax on the ballot in August.