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Vedic City says sales tax won’t hurt county

Fairfield Ledger, USA
Oct. 21, 2003
Erik Gable • Tuesday October 21, 2003

City attorney responds to county supervisors’ questions.

Vedic City officials say even if the city’s population increases with the addition of pandits practicing the Transcendental Meditation program, the increase shouldn’t have a negative effect on any other projects being funded by Jefferson County’s local option sales tax.

Jefferson County supervisors asked during their weekly meeting Monday morning whether an influx of people to Vedic City, along with a recertified census making the increased population official, would result in the city getting a large enough share of the local option sales tax money collected in the county to cut dramatically into the City of Fairfield’s share. They also criticized Vedic City for not dedicating part of its local option sales tax proceeds to pay for the Jefferson County Law Center.

Maureen Wynne, city attorney for Vedic City, said because Vedic City was incorporated in 2001, it is getting much less money from the sales tax than it would if it had the same population and land value but had been around longer.

The Iowa Department of Revenue calculates local option sales tax distribution using a complex formula. The formula is based 75 percent on an area’s population as of the 2000 federal census and 25 percent on the property taxes levied by that area’s government in 1983, 1984 and 1985.

Wynne said about 175 people live in Vedic City, but the area now enclosed by the city had only 85 inhabitants in 2000, so the Department of Revenue uses 85 as the city’s population in its calculations. Since Vedic City did not exist, and therefore did not levy taxes, in the 1980s, it also cannot receive any money from the 25 percent of the formula based on property taxes.

Because of the way state law is written, Wynne said, Vedic City will receive only 36.75 percent of what it would receive if it were an older city.

“If we had accurate census data and had been in existence in 1984, we would get 100 percent, which would be disposed of as we directed,” she said. “Basically, from our perspective, were contributing 63.25 percent to the jail anyway.”Ledger.

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