The City of Des Moines has placed on the August 6 Primary Election ballot a scheme to collect, according to the City, "approximately $1,100,000 per year for City street pavement improvements". Called Proposition 1, the scheme is to "increase the the utility occupation tax from 6% to 8% for a period of twenty (20) years". If approved, the 2.0% increase would be specifically dedicated to provide funding for city street pavement improvements.".

The Proposition suffers from several serious flaws and should be rejected by the voters. Here's why.

First, the City collects a tax from all utilities that provide services to Des Moines, such as cable, sewer, water, and all other such businesses that are contracted with the City. Not one of those services has ever been known to reduce it's customer rates over the years, instead, their rates always increase. So when the City taxes are added to your utility bills as a percentage, the City's take also always increases. The $1.1 million for next year will increase with time, becoming $1.5 million at an inflation rate of 2% for 20 years. Our streets could be paved with gold.

Second, the City's 2013 budget for Road and Street Maintenance is $36,000. To suddenly increase the budget to $1.1 million will be impossible for the City to handle. The result will be a massive rate of hiring by the City to provide for managers to parcel out the dough to enterprising contractors to actually do the work. We can surely believe this will happen smoothly.

Third, the 2% increase must be allocated to the actual businesses that deliver services. There will be no new service provided. Just an increase in the monthly bill. Now, the tax rate on each service is negotiated with that service. The City would have you believe that all those services will quietly allow their tax rate to go up by, not 2%, but 33%. Count on it, they'll demand negotiation.

Fourth, the current 6% utility tax receipts go into the City's general fund. The City promises that the additional money generated by the tax increase will, for 20 years, go into a lock box with only one key – pavement improvements. Just as, to a hammer, everything looks like a nail, in Des Moines, everything needing money will look like a pavement improvement.

Fifth, the City expected $1 million income from Real Estate Excise Tax (REET) in 2013. The City Street Fund source detail shows $1.12 million from sources other than the REET for 2013. The City appropriated $1.34 million for the Street Fund. Of this, the Road and Street Maintenance request was $36,000, of which $20,000 was for contracted work. If the City brochure is correct – that REET "for many years funded the City's street paving projects" – it is clear the City intentionally spent most of the REET income for other than street maintenance and that the maintenance problem can go away by a simple prioritization of budgets.

As I drive around Des Moines, I agree that some of the streets need work, some more that others. Then I ask myself, why is this so? A little research on City expenditure priorities shows that up till now, the City didn't care. Does the City suddenly care? Not likely. If the City can get the voters to OK picking city resident's pockets for another million per year, they can spend all the REET dough somewhere else, and maybe even re-program much of the Street Fund. The City already has the money to fix the streets.

Vote NO on Proposition 1.

James Axtell
Des Moines