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LOST impact continues in Traer

July 26, 2019
CJ Eilers - Editor ( , Traer Star-Clipper

Since 2003, Local Sales Option Tax (LOST) has provided the City of Traer with additional funds from the state of Iowa to go back into the community in a variety of areas, including community betterment, youth leagues and the school district.

LOST, which raised sales taxes from six percent to seven percent, was created by the state to provide funds for any "legal use" by the cities implemented in. In 2002, a county-wide vote chose to accept LOST in their cities, except for Traer.

"It's funny because Traer was the only town that voted against in Tama County," City Clerk Jon Panfil said. "Then we had to have another vote that next year to get it implemented. People were maybe scared of raising their taxes, but we would have to pay that increase anyway and not get anything out of it. Everywhere else in the county, you'd be paying that extra cent other than in Traer."

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Local Option Sales Tax has provided funds previously unavailable for community betterment, including downtown Traer, North Tama CSD, the Shaker Gallery and other organizations.

Once fully implemented, the City of Traer had a choice to make: how to use the funds. It could be used to lower tax rates, go towards fixing streets or community betterment. The latter option proposed had more areas LOST could be invested in, leading the city council to adopt community betterment as their use for the allocated funds. A portion of Tama County's entire option tax goes to its communities while a portion remains with the county. No sunset clause exists for LOST in Tama County.

According to Panfil, LOST funds are today used for debt service to the new pool ($50,000 allocated each year), street projects ($18,000) and community groups/events. Examples include the Traer Fire Department, ambulance, the Memorial Building, Winding Stairs Festival and the Shaker Gallery. Initially receiving approximately $40,000 in the early days of LOST, Traer has consistently received over $100,000 over the last several years according to Panfil.

"The City didn't want $50,000 coming from having to raise property taxes anymore than we had to," Panfil said. "They knew it would limit how much would be available for other things, but the pool is a big-ticket item in town. It's helped with a lot of groups who need the money and we can't give them money from property taxes. There are state rules about you can use those taxes for, but the option tax has more leverage in what it help support. Another example is the Shaker Gallery. We used LOSt money to move that building and buy half the shakers."

Another recipient of LOST funds from the city has been North Tama County School District for a wide range of projects and programs. Since its implementation, Patty Calderwood has seen the funds used to the benefit of the school while working for the district over the years.

"[LOST] has really been key to us being able to work on infrastructure such as the new addition put on in 2010," Calderwood said. "That funding was partially a loan against that future SAVE money, so we're able to pay on the loan for this structure. This alone is an example of what LOST does for the school, but we also use it for facility improvements to the football field, the athletic complex, throughout the school or set it aside for projects. We're using some towards the south entrance and making it handicap-accessible."

The school currently runs youth baseball and softball programs during the summer, with funds provided by LOST. Calderwood has also been involved in community betterment projects downtown as benches and planters have been added on 2nd Street.

"It's been used as matching funds for some organizations for projects organizations have," Calderwood said. "Before the city helped us with the rec fund, the school funded it all. When we needed budget cuts several years ago, we were going to do away with that summer program. The city stepped up and said they wanted us to administer these programs because of our expertise and gave us the funds. This way, they are run in continuity with the rest of our education-based activities."

Recipients of the LOST money in Traer are selected by the City Council each year, with the recipients of the 2020 fiscal year selected during their last meeting on Monday, July 1.

"We used to ask for requests for these funds like you do for grants from the Tama County Foundation, but then we created a more formal process of requests coming at a certain time each year for the council to go through," Panfil said. "Since we've been limited by the $50,000 for the pool and $18,000 for a street project, the rest has gone to the same people: the Shaker Gallery, the school and its youth program and the Chamber of Commerce. It's another way to provide money to these groups and city functions."

For more information about Local Option Sales Tax, contact the Traer City Clerk's Office at (319) 478-2580.



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