Board hears finance report on SAVE, warns of potential $6.5M loss if state phases out school sales tax
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Summary
Finance staff and the superintendent explained Iowa's SAVE revenue history and local uses, and warned that a proposed phase-out of the 1¢ school infrastructure sales tax could cut an estimated $6.5 million from district facility funding over the next decade.
The Lewis Central board received a finance report Jan. 19 that reviewed the history and local use of Iowa’s school infrastructure sales tax and discussed proposed state changes that could affect district funding.
Finance presenter (Unidentified Speaker 2) traced the program from county school infrastructure local option sales tax (SILO) to the statewide SAVE (Secure and Advanced Vision for Education) penny sales tax, which now distributes funds to school districts on a per-pupil basis. She emphasized that SAVE funds must be used for the local voter-approved revenue purpose statement, where Lewis Central has restricted use to infrastructure and property tax relief. "These funds are exclusively for infrastructure and property tax relief," she said.
Superintendent (Unidentified Speaker 5) reviewed proposed elements of the governor’s tax plan, including a 2% state supplemental aid increase and a proposal to phase out part of the 1¢ SAVE allocation over the next decade. He told the board that a 50% phase-out would reduce facility funding by an estimated $6,500,000 over 10 years and warned that shifting the revenue back to property tax would shift the burden to local property owners. "If they're gonna phase 50% of it out ... we would lose an additional $6,500,000 in funding for facilities over the next 10 years," he said.
The presenters outlined typical SAVE expenditures — technology (Chromebooks), safety and security upgrades, critical infrastructure (HVAC, roofs), buses and vans, and CTE/fine-arts expansions — and noted the district also uses SAVE dollars to pay down bonds (Titan Hill bond was cited as an example). They said the SAVE penny is currently extended through 2051.
Board members asked about pending legislation and potential funding impacts. The superintendent said he had contacted legislators, including Senator Dawson, to express concerns and to seek clarity on proposals that could alter the district's capital planning.
No procedural action on SAVE was taken at the meeting. Presenters said staff would continue to monitor legislative developments and return to the board with implications for the district’s long-range facility plan.