This article was published in The Daily Nonpareil.
At a time when property valuations are increasing at double-digit rates and inflation is cutting into household budgets, Council Bluffs should be reducing its reliance on property taxes and making them more consistent, not introducing expenses and uncertainty.
The $440 million Omaha streetcar project is in the first stages of construction across the border in Nebraska. A proposed extension to Council Bluffs, Iowa, would run through the First Avenue Corridor over an $80–100 million bridge for streetcars, bikes, and pedestrians.
Council Bluffs’ population is a fraction of Omaha’s and is not seeing significant growth. Transit utilization is limited, and two bridges, carrying I-480 and I-80, already connect the two cities. Ridership on two bus lines across the border is only enough to support hourly service during the day. These facts all beg the question- is creating another transportation option wise?
City leaders in Omaha have raised private funding to cover the cost overruns of the streetcar project, which is an option Council Bluffs will not have. Instead, Council Bluffs has used grant money and seeks federal funding for a study to explore streetcar feasibility and funding. One financing possibility is tax increment financing (TIF), which Omaha is already utilizing.
The growth in tax revenue within a defined TIF district is devoted to a specific purpose, including the repayment of bonds issued to fund the project. Cost overruns or unanticipated expenses become the responsibility of the city, most likely to be covered by property taxes. Currently, Council Bluffs residents enjoy a lower tax burden than residents of Omaha. However, the city’s property tax rate is higher than most of Iowa’s largest communities ($18.26) and its property tax revenue has grown 40.2% in the last 10 years — a period with a mere 0.4% increase in population.
One could hope that introducing a streetcar would expand the overall property tax base of Council Bluffs. However, should the project affect the tax base in any capacity, it is plausible, and perhaps even probable, that property values would simply be reshuffled within the city. At a time when property valuations are increasing at double-digit rates and inflation is cutting into household budgets, Council Bluffs should be reducing its reliance on property taxes and making them more consistent, not introducing expenses and uncertainty.
Even as it increases costs and complexity, a streetcar extension to Council Bluffs would likely be underused, as streetcars in other midwestern cities have been. The expensive multimodal bridge is particularly unwise, considering the Bob Kerrey Pedestrian Bridge already connects trails in Omaha and Council Bluffs, with the “Baby Bob” connector about to make more amenities accessible on the riverfront. Meanwhile, Des Moines provides an important warning, given its problems funding public transit despite a population that is nearly 3.5 times Council Bluffs’. The focus should be on ensuring the current bus service in Council Bluffs is maintained instead of adding services with the potential to erode funding for existing programs.
Any genuine need for more transportation in the urban core could be answered through agreements for Metro Area Bus routes to connect the two cities. Another option for Council Bluffs’ First Avenue Corridor is micromobility, a concept including not only traditional bikes, but electric bikes and electric scooters, as well. Electrification and design alternatives are making micromobility increasingly accessible to people of all ages and all levels of physical ability. Approximately 60% of Council Bluffs residents live within a one-mile radius of the 2.5-mile-long First Avenue rail trail.
Accommodating micromobility would not only cost much less than a streetcar, but it would also allow greater convenience and flexibility for individual transit needs. Iowa must resist the call of public works projects for public works projects’ sake. If needs are not being met, advocates should slow down, articulate them, and then consider the many alternatives to big-budget tax schemes.
Marc Joffe is a federalism and state policy analyst at CATO Institute, and Jerome Famularo is a research associate at CATO.
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