Des Moines Local Option Sales Tax Rings Up $38M In First Year

Press release from the City of Des Moines:

August 20, 2020

DES MOINES, IOWA – Thursday, August 20, 2020 – The City of Des Moines received $38 million of revenue in the first year of the Local Option Sales & Service Tax. The figures are consistent with initial estimates and were publicly released this week in an annual report presented during a quarterly strategic meeting of the City Council.

First-year revenue in the collection period that began July 1, 2019 totaled $38,121,713, slightly more than the $37 million projected when voters overwhelmingly approved Local Option in March of last year.

As required by state law, half of the Local Option revenue provided property tax relief in the form of a 60-cent levy rate reduction. Funds also went toward street rehabilitation, storm water upgrades, enhanced public safety, neighborhood improvement and the expansion of library hours.

This chart shows a breakdown of how the revenue was used:

“Through Local Option, voters put in motion a catalyst that will lead to decades of positive change and measurable difference for our neighborhoods and residents,” said Mayor Frank Cownie. “As a City, we had an obligation and commitment to identify projects, services and initiatives that benefit residents, businesses and community organizations – while exhibiting financial responsibility and transparency,”

A copy of the 20-page Local Option Sales & Service Tax Fiscal Year 2020 Expenditure Report may be found here.

While the community spread of COVID-19 affected the Des Moines economy starting in mid-March, the State of Iowa did not alter monthly payments to the City. In November, the state will reconcile Local Option revenue for the previous year in the upcoming monthly payments in the current fiscal year. That amount won’t be known until November.

“We know there will be an impact and it could likely be significant,” said City Manager Scott Sanders. “This will undoubtedly affect our future projects and property tax relief in the upcoming years.”

For more information and additional details about expenditures, please go to our updated Local Option Sales & Service Tax webpage DSM.city/localoption.

This press release was produced by the City of Des Moines. The views expressed here are the author’s own.