Apr 28, 2021 - News

Des Moines residents could see a transit-driven property tax bump

Illustration of a public bus made of a $100 bill and quarters

Illustration: Eniola Odetunde/Axios

DART is set to launch its first budget year using a new formula that bases property taxes for regional transit services on a population and service calculation, CEO Elizabeth Presutti tells Axios.

Why it matters: Des Moines' estimated transit tax rate will grow from around 95 cents per $1,000 valuation to an estimated $1.50 in the next eight years as the new formula is phased in.

  • That’s roughly $62 more a year for a person with a $200,000 home after tax breaks are factored.
  • West Des Moines’ estimated tax rate will grow by about 12 cents.
  • All other areas will retain or reduce their current tax rate contributions.

The backdrop: Lawmakers gave DART the ability to collect property tax in 2006 from the communities it serves.

  • Its budget for the fiscal year that begins July 1 is almost $38 million, mostly paid through property tax and fare revenue.

The state of play: DART Commission members have wrestled for years with how to fairly distribute costs for the service.

  • The new formula factors in population and uses service tiers to help determine a city’s contribution.

Yes, but: DART’s Commission has determined that property taxes are not a viable long-term funding mechanism.

  • Special taxes on sales, vehicles, income, payroll, fuel, hotel/motels and car rentals are all under consideration.

What's next: Budget diversification could take years and require approval from lawmakers and voters.

  • DART is monitoring statewide legislation that would allow hotel/motel taxes to help pay for regional transit services.
  • If approved, local taxpayers could be asked to vote on a special hotel/motel transit tax within the next year to lower property tax rates.

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