The Iowa City City Council has approved a reduction in downtown parking meter rates to $2. 25 per hour, responding to feedback from local business owners concerned about the impact of higher fees on customer traffic. This decision reverses a previous increase to $3 per hour, which had only been implemented in July and raised the rate from $1. 50 per hour. The council's original plan was to utilize the increased parking revenues to support a fare-free bus service in Iowa City, which is partially funded by federal American Rescue Plan Act money.

However, the new ordinance was passed with a nearly unanimous vote, with Councilor Andrew Dunn being the only dissenting voice, expressing concern over the reduced funding for transit-related improvements. The council’s expedited action combined the second and third readings of the ordinance, allowing for swift implementation of the new rates. While the reduction may alleviate some financial strain on local businesses, it raises questions about how the city will address transit funding moving forward. The previous parking rate increase was expected to generate $3 million annually, but the implications of this 75-cent reduction are still unclear. City officials continue to evaluate the balance between supporting local commerce and maintaining the city’s transit funding.