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Iowa Governor Signs Two-Decade Extension Of School Sales Tax Into Law

Katie Peikes
Gov. Kim Reynolds signs the statewide sales tax extension into law.

Iowa Gov. Kim Reynolds signed a bill into law Friday that extends a statewide sales tax for school infrastructure improvements.
Iowa’s statewide sales tax that can be used to fund school infrastructure improvements was set to expire in 2029, but the new law extends it until 2051.

Reynolds signed the bill into law at the Sioux City Career Academy, flanked by lawmakers, educators and students. She said investing in the schools is an investment in the future.

“And these improved and enhanced facilities and classrooms are essential components as we really do everything we can to make sure we have a 21st century education opportunity for our young people,” Reynolds said, “and this is exactly what that looks like.”

The statewide 1-cent sales tax, now known as “Secure an Advanced Vision for Education,” was passed as a local option in 1998 in Sioux City, making the local school district the first to do so in the state, said Sioux City Community School District Superintendent Dr. Paul Gausman. Iowa adopted an increase in a statewide formula in 2008 that replaced the local option sales tax.

Gausman said SAVE revenues have helped his school district in the past and will help in the future.

“We’ve got a couple of elementary facilities that have not been touched with this round of sales tax dollars,” Gausman said. “Those elementaries will be able to be renovated or replaced with the extension.”

The Career Academy, where the bill signing was held, is a result of those SAVE revenues, he said. The academy helps students explore potential jobs and trades. The new law also aims to improve other career academies, by allowing them to get money from SAVE. Iowa's Department of Education will adopt rules for how these funds are distributed as grants to school districts, according to the law.

The extension also gives school districts more property tax relief. By budget year 2021, the amount of funds from this tax going to property tax relief will start to grow until it caps at 30 percent. Reynolds said the extension signed into law is expected to generate over $26 billion from now to 2051.