School sales tax extension clears key hurdle

DES MOINES — A 20-year extension of a 1-cent sales tax to support school projects and property tax relief is halfway to the finish line following passage Wednesday by the Iowa House.

Originally passed in 2008, SAVE — short for Secure an Advanced Vision for Education — will expire in 2029 if legislators don’t act to extend it.

However, House File 546 to continue the sales tax until 2051 was approved 96-3 and now goes to the Senate.

Bill manager Rep. Jacob Bossman, R-Sioux City, was “excited” to run a bill that he called a “win-win for our school districts and taxpayers.”

“Finally,” said Rep. Sharon Steckman, D-Mason City, who said Senate Democrats have been trying to pass the extension since 2015. The House approved it last year, but it was not taken up by the Senate. “So I say finally.”

The 20-year time frame of the original law coincided with the typical 20-year property tax-backed school bond.

Since then, SAVE funds have been used for school safety improvements, technology, art and science labs, fine arts facilities, air conditioning to lessen days lost to extreme temperatures and to reduce property taxes, according to its advocates.

Because SAVE will expire in 2029 without action, school boards say they already are feeling the impact of a shortened bonding stream. Extending SAVE would allow districts to take advantage of low interest rates.

The Cedar Rapids Community School District, where enrollment has dropped, also is relying on a SAVE extension to pay for a sweeping 20-year facilities plan that would close eight elementary schools and build or renovate 13 larger elementaries.

In fiscal 2018, SAVE raised $471 million for Iowa schools or about $972 per student. SAVE raised about $600 million this fiscal year and is projected to net about $800 million in 2049, according to the Iowa Association of School Boards.

For Iowa City, that was $13.6 million and for Cedar Rapids, SAVE raised $16.6 million.

At same time, SAVE generated $10 million for property tax relief and, according to the Legislative Services Agency projections, will generate $520 million for schools in 2051 and $71.5 million for property tax relief.

Republican Reps. Skyler Wheeler of Orange City, Jeff Shipley of Fairfield and Phil Thompson of Jefferson opposed the extension.