Iowa lawsuit against franchise fees has unintended consequences

You’d think everyone in Iowa would be happy that Lisa Connett sued Des Moines City Hall over charging an extra fee on utility bills. 

You’d think so, and you’d think everyone would be happy that she won (it became a class action lawsuit) and…

Now, as a result of her class-action suit, consumers here stand to collect some $40 million in refunds on fees that courts deemed an illegal tax.

But…

But not everyone eligible for a refund is happy. Some have even written to City Hall officials telling them to keep the money.

“We are worried about cuts in services,” said Lance Henning, the executive director of the Greater Des Moines Habitat for Humanity, who said his organization would prefer to forgo the more than $6,000 in repayment it has coming. “We want a strong city.”

A City Council representative, Christine Hensley, said many Des Moines residents tell her they oppose the refunds because, as they see it, “they’re probably just going to have to turn around and pay higher taxes” to cover the cost.

Ms. Connett, 42, is puzzled by some of the sentiment. “They act like I’ve done something wrong,” she said.

A not uninteresting predicament, as told by Dirk Johnson in the New York Times.

PS. I’ll drop two words to explain why cities and states have had to invent weird taxes to continue to provide the government services we citizens all expect: Ronald Reagan. Much more about that in another post.

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