Petition opposes tax funding Main Street

Mar 3, 2010 — The Hawk Eye

Nicholas Bergin

Mar. 3, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- FORT MADISON -- The major hurdle standing between Fort Madison Main Street and $19,000 in funds from a requested new tax may have grown exponentially.

Opponents of the proposed tax on business property within the city's Main Street District have circulated a petition against the tax.

If the petition receives enough signatures, it will mean a unanimous vote by the city council will be required to make the new tax a reality.

"We as a group are not against the Main Street program. We're against how the program is being funded. Raising taxes for Fort Madison is not a good thing," said Fort Madison property owner Todd Schneider, who is one of the backers of the petition opposing the tax.

Schneider spoke Tuesday during the city council's regular meeting.

The petition had yet to be submitted to the city Tuesday. The deadline for submitting the petition is today.

In January, Fort Madison Main Street presented the city with a petition requesting the establishment of a new Self Supported Municipal Improvement District with a tax levy of $1.50 per $1,000 of assessed valuation on business properties within the city's Main Street District.

Revenue generated from the tax, about $19,000, would be turned over to Main Street, which plans to use the funds for operating expenses related to marketing downtown and development of its economic vitality.

The SSMID funds represent about 27 percent of Main Street's anticipated $70,700 annual operating budget.

"Fort Madison Partners and the Main Street Program, we still support and believe the SSMID tax is the best way to fund the Main Street program, which we believe is vital to our city," said Nora Dukowitz, director of Fort Madison Partners, the umbrella group under which the city's five economic development and business groups now exist.

City officials held a public hearing on the issue Feb. 2 and must wait 30 days after the hearing to vote on whether to establish the district.

A special meeting to vote on whether to establish the SSMID has been scheduled for 7 p.m. Thursday at the city council chamber, 811 Avenue E.

But the submission of a petition in opposition to the SSMID would mean its establishment will require a unanimous vote rather than a three-quarters majority vote.

The petition needs the signatures of 37 property owners, which equals 25 percent of property owners in the district. Also, the signatories must represent ownership of 25 percent of the property within the district, said City Manager Byron Smith.

There are more than enough signatures on the opposition petition, said Doug Abolt of Donnellson, who owns the former Sheaffer Pen factory building at 301 Avenue H.

"We have seen an avalanche of support in the last three days," Abolt said.

Abolt declined to state specifically how many signatures were on the petition.

Abolt's property is assessed at $337,010, according to the Lee County GIS Beacon Web site. He would have to pay an additional $505.52 annually in taxes if the council approves the SSMID tax.

Burlington has a downtown SSMID tax of $3 per $1,000 of assessed valuation that has provided about $64,000 annually during the past 14 years for Downtown Partners Inc., a Main Street organization.

Abolt said the SSMID tax would be detrimental to economic development in Fort Madison.

Main Street Board President Chuck Vandenberg disagreed, arguing the tax would support economic development by funding Main Street.

"This program is geared towards economic enhancement through historic preservation," Vandenberg said.

The SSMID would have a sunset clause requiring it be reviewed in five years, at which time Main Street plans to allow the tax to expire, Vandenberg said.

"That certainly is my goal and my objective, and I think it is the goal of the board, to be self sustaining. But we have to get started. And this is an important part of getting started," Vandenberg said.

Opponents have asked council members to discuss alternate funding options, including giving Main Street funds from the city's hotel/motel tax.

Doing so would require reducing funding to the city's Tourism Grant Fund and other groups that rely on the money, including the Fort Madison Convention and Visitors Bureau, Old Fort Madison, North Lee Historical Society and the Fort Madison Area Artists Association.

The city collects an average of about $135,000 annually from the local hotel/motel tax.

Three members of the Fort Madison Council -- Jason Huppert, Brad Randolph and Tim Waggoner -- own property within the proposed SSMID district and likely will abstain from voting on the tax to avoid conflict of interest.

Newstex ID: KRTB-1064-42529927