Iowa House OKs 20-year extension of school sales tax

DES MOINES ? The Iowa House approved a 20-year extension of a 1 percent sales tax that will provide more than $16 billion in school infrastructure improvements and property tax relief by 2050.

On a 95-3 vote, representatives approved extending the Secure an Advanced Vision for Education Extension (SAVE) that local districts use to reduce property tax levies for bonds, physical plant and equipment improvements, educational and recreation programs and other authorized infrastructure projects.

The sales tax had been scheduled to end in 2029.

It won?t be just for bricks and mortar, Rep. Zach Nunn, R-Bondurant, said.

The dollars can be used for ?technology, school safety, the smart boards, the future fabrication of where we are going as a state that is premier in its learning environment,? he said.

?Well, it?s about time,? Rep. Dave Jacoby, D-Coralville, said about passage of House File 2481 that lawmakers and local school districts have been working on for the past few years.

The bill now goes to the Senate where a similar bill is being debated in the Ways and Means Committee.

School groups have been pushing for the Legislature to either extend the tax?s ?sunset? or repeal the sunset because having the sales tax saves property tax dollars.


Rep. Sharon Steckman, D-Mason City, echoed that sentiment and wondered about the Republican majority?s timing.


?We could have done this last year or the year before instead of leaving districts on pins and needles until right before the election, which is interesting,? she said before voting for the bill.


The bill would increase the amount of SAVE funds that go into property tax relief from 2.1 percent to as much as 12 percent.


The Property Tax Equity Relief (PTER) fund would grow by 1 percent per year when SAVE revenue grows by 2 percent over the previous year. The bill also creates a ?Foundation Base Percentage Fund? to provide property tax relief to all districts.


In fiscal 2017, the 1 percent sales tax yielded $454.3 million for SAVE and $9.75 million for the Property Tax Equity Relief fund.


If revenue grows by 2.45 percent annually, by 2050 an estimated $893.1 million will be going to SAVE and $121.9 million will be going to property tax relief.


The House also included language making clear the SAVE funds could be used for security measures at schools.


?These days are unpredictable on school campuses. Violence knows no demographic,? Rep. Kevin Koester, R-Ankeny, said. The Ankeny schools, where he worked for more than 30 years, have spent more than $1 million on security measures.


While Democrats have tended to focus on the impact SAVE has ? and will have ? on improving school infrastructure, Republicans emphasized property tax relief.


?As a parent of elementary-aged kids, this has been a priority for me,? said Rep. Ashley Hinson, R-Marion, who said the Linn-Mar school district has put $9 million into property tax relief, and in Marion Independent, SAVE dollars are equivalent to $4 per $1,000 of assessed valuation.


Since 2007, Cedar Rapids and College Community school districts have put $40 million and $20 million, respectively, of SAVE funds into property tax relief, she said.