DES MOINES — After being stalled in legislative traffic in recent years, a 21-year extension of a one-penny sales tax projected to bring more than a $16 billion investment in school infrastructure improvements and property tax relief by 2051 appears to be moving full-steam ahead this year.
“This is very important for our school districts to make sure they have the ability to replace existing buildings that are in need of repair or falling down or if they are a growing district and need to build a new facility,” Iowa House Education Committee Chairman Cecil Dolecheck, R-Mount Ayr, said Thursday.
“It has to happen,” added Rep. Sharon Steckman, D-Mason City, who said some local school districts have been deferring building and maintenance until the Legislature extends the Secure an Advanced Vision for Education Extension (SAVE) beyond 2029, when it is scheduled to expire.
Without the guaranteed 20-year revenue stream from SAVE, school districts face bond financing interest rates 1 to 1.5 percent higher, Dolecheck said.
After hearing support from representatives of school boards, teachers, farmers and other interest groups Thursday, a subcommittee sent House Study Bill 18 to the full House Education Committee for action as soon as next week.
The House approved a similar bill 95-3 last year, but it was not taken up by the Senate. This year, Senate Education Committee Chairwoman Amy Sinclair, R-Allerton, plans to move similar legislation out of subcommittee next week.
Like Dolecheck, she said the extension is vital for districts of all sizes across the state.
“For a lot of districts, they’re not necessarily building but replacing roofs and boilers and paving sidewalks,” Sinclair said. “For a lot of districts, this is routine maintenance and it is essential if we don’t want (the cost) to come out of the general fund, which would mean an increase in property taxes.”
She thinks senators want more discussion of the property tax relief aspects of the bill to make sure it is going to the right places.
Some lobbyists questioned whether too much of the future SAVE revenue would go to property tax relief instead of school construction.
“Although the additional property tax relief would not be our favorite thing to do, we know it’s necessary to get broad bipartisan support,” Margaret Buckton of Rural School Advocates and the Urban Education Network told the subcommittee.
“Do we need to do that or are there better uses for programs for the students?” Brad Hudson of the Iowa State Education Association asked. “We know it’s always a balancing act to pass anything. We’ll always raise that with you, but at this time we feel this legislation is moving in the right direction.”
The bill also would direct a yet-to-be-determined amount of money toward career academies, which is one of Gov. Kim Reynolds’ priorities.
HSB 18 would increase the amount of SAVE that goes into property tax relief. The Property Tax Equity Relief fund would grow by 1 percent per year when SAVE revenue grows by 2 percent over the previous year. The fund would be capped at $12 million.
In fiscal 2017, the 1-cent sales tax yielded $454.3 million to SAVE and $9.75 million to the tax relief fund. If revenue grows as projected — 2.45 percent annually — in 2051 that means $893 million will go to SAVE and $121.9 million to the tax relief fund.
Subcommittee members and lobbyists suggested changing language in the bill that would require districts to secure school buildings before building athletic facilities. Emily Piper of the Iowa Association of School Boards said a survey of districts found 85 percent already have secured entrances. She preferred language in a Senate draft that would not force districts to retrofit buildings that will be replaced.
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If approved by the Education Committee, the bill must go to Ways and Means because it involves taxation.
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