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Cedar Rapids, Iowa 52401
Here’s how school bonds impact property taxes
School districts rely on the voter-approved property tax to fund facility needs
Oct. 13, 2025 4:30 am, Updated: Oct. 13, 2025 7:23 am
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Eastern Iowa schools are asking voters to consider multimillion school bond referendums in the upcoming election Nov. 4, that would address aging facilities.
One curious Iowan wondered why some school bond referendums increase property taxes while others do not. So, they wrote to Curious Iowa, a Gazette series that answers readers’ questions about our state and how it works, for the answer.
What options do schools have for facility costs?
Bonds are one of three sources of money schools can use to improve or build facilities.
One source is PPEL — or the Physical Plant and Equipment Levy — a property tax levy that can be used to fund school improvements and routine and unexpected maintenance projects.
The other source is SAVE — or Secure an Advanced Vision for Education — a capital projects fund funded by an existing statewide sales taxes allocated by the state of Iowa to school districts based upon certified enrollment.
In the Cedar Rapids district, SAVE money already is earmarked for other facility projects. The district is remodeling and constructing an addition at Harrison Elementary School and building new schools to replace Hoover and Van Buren elementary schools using SAVE dollars. The schools are expected to open fall 2027.
PPEL is used for resurfacing parking lots and sidewalks, improvements and replacements to heating and cooling systems, roof repairs, lighting and to purchase new school buses, said Karla Hogan, chief financial officer for the Cedar Rapids district.
What makes up school property tax levies?
Bond referendums can be just one factor of Iowa property taxes levied by K-12 schools.
“There’s so many components to property taxes. That’s part of fiscal management of your district and responsibility to your taxpayers. Most school districts try to maintain a level property tax to accomplish what they need for students,” said Christie VanWey, chief financial officer for the College Community School District.
School bond referendums are important options for school districts to build new and maintain current facilities, VanWey said.
“A lot of school buildings today are old and in need of repairs. It’s really important to keep our facilities safe and make sure we have entrances that are secure, which was not a priority when most of these buildings were built,” VanWey said.
The school bond levy cannot exceed $2.70 per $1,000 taxable valuation in any one year unless the voters approve a one-time election to set the maximum at $4.05 per $1,000 taxable valuation in a year. This additional levy must be approved by 60 percent of the total votes cast in favor of a $4.05 levy.
When a school bond referendum is approved by voters, school districts then have the authority to sell bonds that will be paid back by property tax revenue, said Karla Hogan, chief finance officer for the Cedar Rapids Community School District.
Other levies that make up school property taxes include the Cash Reserve Levy, the Instructional Support Levy, the Management Levy, the Education Levy, the Physical Plant and Equipment Levy and the Debt Service Levy.
The revenue from each levy is restricted for specific purposes.
The instructional support levy requires board approval every five years or approval every 10 years through a local election. It funds
The management levy, for example, is a tax that can be levied annually by school boards to fund unemployment benefits, liability insurance and early retirement benefits.
The Physical Plant and Equipment Levy — or PPEL — can be used for the purchase of grounds, construction of buildings, technology and bus purchases. School boards can levy up to 33 cents on their own and an additional $1.34 with voter approval. The maximum levy amount is $1.64 per $1,000 of taxable valuation.
Cities, counties, school districts, and townships are the most common taxing authorities.
Each taxing authority determines its own budget. The budget includes the cost of providing services, the amount of aid received from the federal and state governments, the amount of money remaining from previous years, and revenue from other charges for services.
The assessed value of property is estimated by the Iowa Department of Revenue and reported to the county auditor. Credits such as the homestead credit are subtracted before a final tax bill is sent to the taxpayer.
Why do schools ask voters to approve bond referendums?
Voters in the Cedar Rapids, Central City and Williamsburg school districts will be asked to vote on multimillion school bond referendums in the upcoming election on Nov. 4th.
The $117 million Cedar Rapids school bond referendum includes plans to renovate four schools to address the needs of aging facilities.
Chad Schumacher, director of operations for the Cedar Rapids district, said the investment will save the district money long term by reducing the number of buildings in the district’s inventory. Improvements to existing buildings including new heating and cooling systems and windows also will save the district on operational costs.
“The best way we can reduce taxes for our community is to be fiscally responsible, pay off our debt and only take on new debt when we need to,” Schumacher said.
The plan — if approved — would save the school district $140.8 million in operational costs over the bond’s 20-year life cycle, or $6.48 million a year, Schumacher said. This means the district would see a return on investment of almost $24 million if the $117 million bond is approved.
It would cost the owner of a $200,000 home in the Cedar Rapids school district about $7.47 a month or $89.60 per year.
Central City’s $7 million school bond referendum would fund a new secure entrance to the elementary school, classroom renovations and repairs and overall improve accessibility if approved by voters.
The referendum, if approved, would add about $2.70 to the district’s property tax levy. This would set the property tax rate for fiscal year 2027 — which begins July 1, 2026 — at about $16.10 per $1,000 of taxable assessed value.
An almost $8 million school bond referendum headed to voters in the Williamsburg school district would modernize and expand classrooms to better serve students enrolled in work-based learning classes in the industrial technology, family and consumer science, and agriculture if approved by voters.
If approved, it would increase taxes by $1.07 per $1,000 of taxable property value. For the owner of a house with an assessed value of $100,000, the impact is an additional $3.80 a month or $45.56 a year. For a homeowner of a $500,000 house, the impact is an additional $20.71 a month or $248.57 a year.
In Iowa, school bond issues — basically, loans that schools take out for set periods of time (typically for 20 years) — require a supermajority of 60 percent approval to pass. In approving a bond issue, voters in the district agree to repay the loan, with interest, through their property taxes.
Following approval of a referendum, school districts work with a financial partner to sell bonds — which are essentially IOUs — to buyers, usually investors, financial institutions or groups like mutual funds. The interest rate is determined at the time of the bond sale. The school then receives the money to fund the project and uses future revenues to pay back the amount of the bond, plus interest.
Why some districts routinely pass bond referendums
A school bond referendum hasn’t been approved by taxpayers in the Cedar Rapids Community School District in about 25 years.
Some communities pass bonds more regularly, so when one expires, they ask taxpayers to approve the next one. This keeps property taxes more consistent, whereas school districts that haven’t had a school bond referendum in awhile might see a sharper increase to their property tax levy.
Voters in the College Community School District, for example, have approved seven school bond referendums since 2000.
Most recently, the district passed a $43 million bond referendum in November 2023, to construct a pool and recreation center in partnership with the YMCA of the Cedar Rapids Metro Area.
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