City of Decorah studying franchise fee

The City of Decorah is studying proposal for 1 percent franchise fee on utilities.  The franchise fee would be assessed on a monthly basis for energy usage through Alliant Energy and Black Hills Energy.  

If a franchise fee on utilities is approved, the current 1 percent local option sales tax on utility bills would be lifted.  That would mean most residential customers would not notice an increase in their bills.  However, since non-profit groups do not pay taxes, the 1 percent franchise fee would end up raising more money for the City of Decorah than the 1 percent local option sales tax on utility bills currently does.

City Finance Committee chairperson Paul Wanless says his group is studying the franchise fee because of the city's current tight budget.  New legislation gives Decorah and 25 other cities in Iowa the right to charge a franchise fee.  Supporters of the franchise fee say it helps ease the property-tax burden by spreading the cost of government services to nonprofits and other entities that don't pay property taxes

Iowa City, Coralville, Waverly, Cherokee, Muscatine, Burlington and Des Moines are among the Iowa cities that either have approved a franchise fee on utilities or are discussing one.

For an explanation of how franchise fees work, visit the Iowa League of Municipalities website.