Voters in Des Moines will decide today whether to allow the city to collect a “franchise tax” on utility bills. The money would be used to repay tens of millions of dollars collected in “franchise fees” between 2004, when a class-action lawsuit was filed challenging the fee as an illegal tax, and 2009, when the Iowa legislature approved and Governor Chet Culver signed a law allowing cities to charge franchise fees. The Iowa Supreme Court ruled in March 2012 that the city would have to refund the franchise fees collected between 2004 and 2009. The Iowa legislature approved language that would have allowed the city of Des Moines to collect a franchise fee for seven years, but Governor Terry Branstad vetoed that line item.  

Des Moines city leaders then considered three options for repaying the estimated $42 million: cutting city staff or services (which already took a hit during the “Great Recession”), raising property taxes, or raising the franchise fee on utility bills. City leaders opted for the franchise tax, but it will only happen if Des Moines voters approve today’s referendum.

Bleeding Heartland user Jon Muller made this case for a yes vote:

There’s an election in Des Moines to approve a Franchise Tax today.  I encourage voters to approve the measure.  It’s a very simple choice for any homeowner.  You can pay a modest tax on your utility bill for 7 years, $2.50 on a $100 monthly bill.  Or, if the measure does not pass, you will pay 41 cents per thousand of taxable valuation for 20 years.  On a $150,000 house, you’re looking at $32 a year for 20 years.

This was the easiest Yes vote I have ever cast.  Not even a line call.  This isn’t about past mistakes, which many of us agree could have avoided this entire situation.  It’s only about how you prefer your taxes be raised, how much they will be raised, and for how long.  More than 40% of the property in Des Moines isn’t even subject to property taxes, but virtually all of the property in Des Moines consumes electricity.  A Yes vote means we spread the burden across more taxpayers, at a lower rate, for less time.

Simple.

An analysis by the city determined that raising property taxes “would cost a typical homeowner about $444 over the next 20 years,” while the proposed franchise fee increase “would cost a electric customer about $273 over the next seven years.”

UPDATE: Unofficial results from the Polk County auditor’s office indicate that “yes” passed easily by 8,095 votes to 1,422 (85 percent to 15 percent).