Governor Terry Branstad started the conversation of extending the “sunset” on SAVE (Secure an Advanced Vision for Education) sales tax with a portion of the extension being used for water quality. The proposal wasn’t what Iowa schools were hoping, but it does increase SAVE funds for schools and provides a tangible option for funding Iowa’s Nutrient Management Strategy to improve water quality. The SAVE tax was put in place with a “sunset” (expiration) in 2029. The funds are currently used by schools for buildings and grounds, construction and maintenance, purchases of buses, and technology equipment. The money doesn’t go towards salaries, supplies, or general operating costs. Over the years it has been a facilitator for many improvement projects in schools and a catalyst of the 1:1 computer programs throughout the state putting technology in students’ hands at school and at home.
Education proponents are concerned with the proposal. Optimistically they envision an extension of the sales tax without strings attached or funds being split with other state programs. The Iowa Association of School Boards points out that the proposal would cut $4.7 billion from schools through 2049, which assumes that the tax would otherwise be extended unchanged. That’s a big chunk of money by any standard. As a member of our local school board our district of 580 students would lose about $5 million over that time. I can think of projects that we have discussed that this would fund, and we have not wanted to increase property taxes or even ask through a vote. There are always buses that need replaced and roof repairs and classroom improvements that would be covered with that revenue. The Governor’s proposal does provide $21.4 billion for schools over that time which means about $24 million for our district.
There’s growing sentiment in the political class that SAVE will not be extended in its current form for school infrastructure. The sense of urgency to repair the state’s aging school buildings and reduce property taxes has subsided. The tax dollars have accomplished many of the urgent needs from when it was introduced. It’s been questioned at times because of a few facilities and projects were fulfilling wants versus needs. According to the House Appropriations Committee the state budget has built-in spending obligations that exceed revenue by $54.8 million before new spending proposals are even considered this session. The SAVE fund extension is likely to have worse proposals offered in the years to come if the state’s budget remains this tight. If your skeptical that the state government will extend the SAVE tax solely for schools, this maybe a good compromise. Schools are trading about 5% of their revenue remaining until the current “sunset” expires in 2029 for an additional 20 years of SAVE dollars worth about $14.2 billion through 2049.
The other part of the debate is funding for the Iowa Nutrient Reduction Strategy, a multi-billion dollar program that addresses water quality issues in Iowa. It's a monumental task with no easy answer. It has come to forefront after the Des Moines Waterworks sued three Iowa counties over nitrates. The proposal uses about 18.5% of the SAVE tax dollars along with farmers’ private investments and federal dollars to make improvements in water quality. According to the Iowa Soil Water Future Task Force the program will – a) dramatically reduce cities’ water treatment and flood damage costs, b) meet the EPA Multi-State Hypoxia Task Force goal of 45% reductions in nitrogen and phosphorus by 2030, c) create thousands of jobs for land improvement contractors, land managers, agricultural information providers, and ag retailers, d) enhance the quality of life in Iowa by providing natural resources protections and increased outdoor recreation opportunities, and f) increase the productivity, sustainability, and efficiency of Iowa’s agriculture.
The Governor’s proposal has merit and I believe it is only a starting point in the debate.. As a parent, farmer, and school board member it offers funding for two high priorities, but splits them from the same source. It’s not a question of one or the other, but is the amount right for both and how will each be used. These are two initiatives that deserve everyone’s consideration and input. The proposal continues to fund our education system’s infrastructure, a critical piece of our future, at its current level with $10 million dollar increases each year through 2049, averaging around $645 million a year. Extending the SAVE tax now allows school districts to better utilize bonding for large projects with SAVE dollars to pay off bonds 15 or 20 years. The proposal uses the balance of the tax revenue to fund a share of the Nutrient Reduction Strategy to improve soil and water quality which is also an important piece of Iowa’s future. However, if tax revenues do not grow by at least $10 million in a given year water quality initiatives would get nothing. It;s not a perfect answer.