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No local taxes! Here's how two Iowa towns did it

By Lucia MouatStaff correspondent of The Christian Science Monitor / June 16, 1982



Sageville and Moneta, Iowa

You say you feel as if you're always sending a check to yet another government tax collector?

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If your idea of paradise is a respite from taxes on at least one level, you might want to consider settling down in Sageville or Moneta.

At a time when most cities are scrounging for every tax dollar they can get, these two small towns, like six others in this state, charge their residents no local taxes at all.

Admittedly, they're a bit of a challenge to find. Both Sageville and Moneta, population 291 and 43 respectively and located in the eastern and western reaches of Iowa, are on the map. But neither is marked by a road sign.

And don't expect to find a land of milk and honey in city services. Like other residents, you would be expected to invest in a septic system of your own and to drill your own well for drinking water.

But both Sageville and Moneta get enough dollars back from the state in road use and liquor taxes, awarded on a per capita basis, to take care of street maintenance and lighting and to pay nearby communities or their counties for sheriff and fire protection.

Sageville, tucked off Highway 52 just north of Dubuque and recently singled out by state authorities as the economically healthiest small town in Iowa, also earns interest on its considerable assets (it will finish this fiscal year with

''That's about all the federal money we want to accept -- we don't go much for all these grants,'' says Mayor Joseph Kalvelage, who has lived in such relative metropolises as Moline, Ill., and Chicago and much prefers Sageville's ''elbow room.'' Here he has a large yard of grass he has just finished mowing, a garden, and a small apple orchard. The town boasts two trailer parks, a light industrial plant, and some of the residents commute to Dubuque.

''We're pretty well supervised as it is -- we can hardly spend a nickel we don't have to account for,'' he says.

Tiny Moneta, once a busy town of 200 to 300 people with three gas stations, a bowling alley, a bank, and a jail, now earns $100 a year by renting out its town hall to a beekeeper who stores his equipment there.

''It probably doesn't even dawn on a lot of people here that we don't pay taxes and you probably wouldn't get that much from homeowners in a small town like this anyway,'' says Glenn Muckey, mayor of the rural farming community.

Mayor Muckey, like all residents of no-tax towns, actually pays property taxes to the county, but at a lower rate than he otherwise would since the town demands nothing back. This former truck driver, now retired, takes great pride in the fact that he pays only $17 a year in property taxes (after veterans disability and other exemptions) while his brother in the nearby larger town of Spencer pays 10 times as much.

The largest single expense in both Sageville and Moneta is for the upkeep and lighting of streets. Sageville expects to spend almost half of next year's $13, 120 budget on streets, including the electricity to keep its two stoplights and tornado warning system operating. Neither town has paved roads. Moneta just paid O'Brien County to lay fresh gravel on its streets. Sageville's Mayor Kalvelage concedes that every once in awhile someone in town decides it might be nice to have blacktopped roads, but the project is usually abandoned after a huddle with the mayor over costs.

Neither town has any full-time city employees. And only Sageville pays its elected officials on the basis of meetings they attend. Moneta abandoned that practice years ago.