Lost Revenue for County, Other Cities
9:25 am
Thu February 21, 2013

Burlington Fee Could Hurt Neighbors

A proposal to help Burlington’s budget could have a negative impact on its neighbors.

Gas/electric bills in Des Moines County currently include a 1% local option sales tax. 

The money generated is pooled and distributed to the county and to incorporated cities.

Burlington is looking to implement a 3% franchise fee, which would eliminate the local option sales tax on gas/electric bills within the city.

City Manager Jim Ferneau says the franchise fee is a necessity for Burlington, given its current financial situation.

He says without the franchise fee, the city’s property tax rate would increase by about $1.65.  With it, the increase would only be about $0.75.

Ferneau acknowledges there would be unintended consequences because Burlington’s share of the local option sales tax would be gone.

County Budget Director Cheryl McVey says Des Moines County could lose $89,000 a year if Burlington implements the franchise fee.

She says if West Burlington follows suit with its own 1% fee, the county could lose another $41,000 annually.

McVey says the county divides the utility money between the secondary roads department (50%), rural services (20%), the sheriff’s office (10%), the county attorney’s office (10%) and economic development (10%).

She says the secondary roads department is already reviewing its budget in case the franchise fee(s) are adopted.