Iowa 5th District Judge Joel Novak ruled yesterday that the city of Des Moines illegally taxed it citizens when the city imposed a franchisee fee of 5% on utility bills. The City of Des Moines will have to refund almost $50 million dollars that it illegally took away from its citizens. The city has pledged to appeal Judge Novak’s decision. The ruling yet another chapter in the five year battle between the City of Des Moines and Lisa Kragnes.
The ruling is bittersweet for Des Moines taxpayers. While they won on principle, it is the taxpayers and the citizens of the city who are now going to be asked to either deal with fewer services, increased taxes, or both. In essence, the citizens who were ripped off by their own city now have to come up with the money so that the city can pay them back.
Making matters worse, the city of Des Moines is planning to appeal the decision. The case already was sent back to the district court by the Iowa Supreme Court, so it seems likely that the appeal will be unsuccessful. The only thing the city of Des Moines will accomplish in this appeal is to take even more money from its own people.
The people of Des Moines need to put the members of the City Council, the City Administrator, and the others involved on notice. It was their arrogance that has caused this mess. If they had stopped illegally taxing their citizens when the Iowa Supreme Court remanded the case back to the District Court, they wouldn’t need to come up with $50 million.
The city of Des Moines claims that it used the franchise fee as a way to keep property taxes low. Instead of being honest with people about the cost to run the city, officials instead used a fee paid to a utility company that is then funneled back to the city.
Why would city officials elect to fund critical services like fire protection through the franchise fee? Politics. There would be outrage if the city hiked property tax rates and/or inflated assessments. By adding the fees on gas and electric bills, people would naturally be upset with their utility provider, not city council members or the mayor.
Lisa Kragnes needs to be commended for her fight against the city of Des Moines. Words like transparency are tossed around carelessly nowadays, but local and state governments have failed to be honest with their citizens. Kragnes’ case provided some much needed sunlight on how the city of Des Moines operates.
blog comments powered by Disqus