Update on the SAVE Statewide One-Cent Sales Tax for School Infrastructure

Superintendent News & Views

Update on the SAVE Statewide One-Cent Sales Tax for School Infrastructure

By David Hill, North Tama Superintendent

This past spring, Governor Kim Reynolds signed a bill into law that will truly make a positive difference for Iowa’s school districts, students, and property owners. House File 546, signed by the Governor after receiving bipartisan support in the Iowa legislature, extends the statewide one-cent sales tax for school infrastructure for an additional 20 years while providing additional property tax relief for property owners.

Gov. Kim Reynolds signed HF546, the SAVE extension, into law on May 24, 2019 at the Sioux City Career Academy. The law extends the penny sales tax for school infrastructure to January 1, 2051.

Commonly called the “statewide penny,” the official term is SAVE, which stands for Secure an Advanced Vision for Education.  Since SAVE became law in 2009, it has allowed Iowa’s school districts to maintain and upgrade their facilities and to provide students with increased school security, safer transportation systems, and better access to modern technology as well as the necessary technology infrastructure without increasing the burden on property taxpayers. 

Since the SAVE became law, the North Tama County Community School District has used these revenues to improve and maintain our facilities, build the 2010 addition (which included the Jr. High wing, gym lobby, locker rooms, and administrative offices), improve student safety by installing controlled-access systems and video security, air condition our classrooms, improve handicapped accessibility, provide 1-to-1 computing devices and computer labs, improve technology infrastructure, purchase buses and vehicles, install air conditioning and seat belts on route buses, repair roofs, and to provide numerous other improvements to our academic, athletic, and fine arts facilities.  During the same time period that all of this has been accomplished, the burden on North Tama’s property taxpayers has been reduced.  The current property tax rate of $10.23 per thousand is one of the lowest property tax rates in our region. 

The current statewide penny had been set to expire in 2029. The year 2029 may seem like a long way off, but that time frame is short enough to impact school districts’ ability to issue bonds against future revenues.  Realizing this, leaders in the Iowa Statehouse had been working to achieve bipartisan support for extending SAVE for the last few legislative sessions.  A compromise was finally reached this year. 

The new SAVE law isn’t identical to the previous one.  Among other differences, the new SAVE commits additional funds for property tax relief.  Depending on the annual growth in statewide sales tax revenues, the amount dedicated to property tax relief will increase each year by up to 1% until it reaches a cap of 30.0% of the funds generated.  Another change in the law requires a public hearing before SAVE revenues are spent on athletic facilities that are not attached to a school building.

Consumers won’t notice a change at all -- sales taxes paid on purchases throughout Iowa will remain the same.  Funds generated by the SAVE go into a statewide pool that is distributed to districts based on certified enrollment...this makes the distribution of funds more equitable for school districts, regardless of whether it is an urban district with a lot of retail business or a more rural district with fewer retail transactions. 

In the coming years, SAVE revenues will continue to be vital for North Tama to maintain our buildings and boilers, to continue upgrades to facilities, technology infrastructure, student technology, and transportation equipment. In addition, our facilities need continued accessibility improvements for handicapped individuals.

The price tag for the improvements mentioned in the preceding paragraph is likely to be high. Accomplishing these items within a reasonable timeframe may require bonding for a period of more than ten years.  The extension of SAVE makes that possible. 

Before North Tama was able to borrow funds for the 2010 addition project, it was necessary for voters to approve a Revenue Purpose Statement (RPS) that gave the district the greatest amount of flexibility allowed by law when using SAVE revenues.  That RPS ballot measure received overwhelming voter approval. Voters at that time realized that a “Yes” vote didn’t cost them anything and gave their school district the flexibility to use SAVE funds to meet the needs that had been prioritized locally. Those “Yes” votes made a major addition and renovation project at North Tama a reality without raising anyone’s taxes. 

Now that SAVE has been extended by the legislature, school districts must pass another Revenue Purpose Statement ballot measure before bonding against future revenues beyond the original SAVE sunset date.  At the September school board meeting, the North Tama board will be considering whether to have a Revenue Purpose Statement measure included as part of the November election ballot.

Whether it is on our local ballot this November or not, I’m sure voters across the state will be voting on Revenue Purpose Statements over the next few years as the sunset of the original SAVE approaches. It is my guess that voters across Iowa will once again vote in support of these measures, as it really is a “no-brainer.”  Consumers statewide will pay the sales tax either way, and school districts statewide will receive the revenues either way -- the RPS just gives districts a little more flexibility with the dollars they are already receiving. 

If you’d like to hear the school board’s discussion as they consider this topic, consider attending the September school board meeting on Monday, September 16 at 7:00 p.m. in the North Tama ICN Room.  I will keep you posted on the board’s decision in this column.  If the RPS is on the ballot, I will use this column to provide detailed information and to answer any questions submitted by district patrons. 

As I close this column, just a reminder to all district patrons that there will be four school board seats up for election this November, and that nomination forms for school board candidates are now being accepted in the district office.  Forms can be picked up during business hours from board secretary Terrill Karr, and completed forms with the appropriate number of signatures must be returned to our office no later than September 19 at 5:00 p.m.

I encourage your feedback on this column, along with any questions you may have. You are welcome to visit my blog at http://redhawksupt.blogspot.com where you can read all of my columns and leave comments if you wish. You are also welcome to follow me on Twitter, where my handle is @DavidRobertHill.