DES MOINES, Iowa (AP) - Des Moines raised $38.1 million in the first year of a one-cent sales tax increase, but officials expect that to decline significantly in the next year because of the coronavirus pandemic.
City officials said sales tax revenue will be down in the next year because the retail and travel industries have been hit hard by restrictions related to the coronavirus. Typically, spending by visitors accounts for roughly one-third of the city’s annual sales tax revenue.
To help account for the lost revenue, the city carried over $8.5 million in reserve funds from last year’s budget.
Mayor Frank Cownie said the new sales tax that took effect in July 2019 helped the city make progress on projects that had previously been delayed because of a lack of funding.
The city has used $5 million for street and sidewalk repairs, including 17 miles of neighborhood roads and 11 miles of major streets.
The city also plans to spend $1.1 million on buying out properties in floodplains and demolishing roughly 100 uninhabited structures in parts of the city.
Half of the money from the new sales tax is being used to reduce the city’s property tax rate.
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