Education

Iowa SAVE tax extension clears path for Cedar Rapids' schools plan

Governor signs 20-year extension of penny sales tax

Gov. Kim Reynolds hands out pens she used to sign House File 546 into law during a ceremony Friday at the Sioux City Community School District’s Career Academy. The bill provides for a 20-year extension of the state’s existing penny sales tax known as SAVE to help fund school infrastructure. The special sales tax for infrastructure originally was enacted after lobbying by Sioux City leaders. (Tim Hynds, Sioux City Journal)
Gov. Kim Reynolds hands out pens she used to sign House File 546 into law during a ceremony Friday at the Sioux City Community School District’s Career Academy. The bill provides for a 20-year extension of the state’s existing penny sales tax known as SAVE to help fund school infrastructure. The special sales tax for infrastructure originally was enacted after lobbying by Sioux City leaders. (Tim Hynds, Sioux City Journal)

CEDAR RAPIDS — The 20-year extension of a penny sales tax — upon which a Cedar Rapids Community School District plan to transform all its elementaries relies — was signed into law Friday by Gov. Kim Reynolds.

The extension of the Secure an Advanced Vision for Education, or SAVE, sales tax is expected to provide public schools in Iowa about $14.5 billion over two decades for facility and infrastructure needs.

The extension is expected to dole out nearly $716 million to the Cedar Rapids district by 2051, according the district.

That estimate — which accounts for an amendment that allocates 30 percent of the sales tax’s revenue to property tax relief — is expected to be enough to cover the Cedar Rapids facilities master plan.

The district plans to close eight of its 21 elementary schools and reconstruct or significantly remodel the other 13.

“We’ve talked about this, it feels like, for a long time. Now, we’re getting to the point,” Superintendent Brad Buck said. “The excitement around building the first new elementary in Cedar Rapids in 17 years is really just great news.”

The first step of the facilities plan calls for construction of a new Coolidge Elementary School, 6225 First Ave. SW, to begin in 2020.

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New, higher-capacity buildings would be built at the sites of both Coolidge and Jackson Elementary, 1300 38th St. NW. Truman Elementary, 441 West Post Road NW, would be closed.

The district expects to save some $2 million annually in operating costs with fewer buildings.

COSTS GOING UP

SAVE is expected to pay for the 15- to 20-year facilities plan despite the plan’s projected price tag increasing by an estimated $85 million.

Originally pitched as a $224 million undertaking, the plan’s expected costs have grown to $309 million, district officials said this week.

Changes in estimated construction costs per square foot are to blame, Buck said, as well as President Donald Trump’s tariffs on steel.

“What you see over time — and we wouldn’t want to go into a recession — but if there are economic swings along the way in this time horizon, often we see that square footage prices drop,” Buck said, noting the long-term plan has phases to deal with such changes.

The facilities plan does not account for the district’s middle or high schools. A general obligation bond — which would impact property taxes and need to be approved by a supermajority of district voters — is expected to be needed for substantial updates to those buildings.

The district also uses SAVE funds for various infrastructure needs, including $2.6 million annually for technology.

“Things are embedded in there right now, and we will continue to honor those because those types of expenses will still be necessary through the life of SAVE,” said Buck, who is resigning in June to become superintendent of Waukee schools.

‘30% OR NOTHING AT ALL’

Community input meetings, initially expected in January but postponed, are to be held this summer.

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SAVE’s extension came as a relief to many Iowa schools, which can seels bonds against the funds to finance security improvements, building repairs and technology, said Dave Wilkerson of the School Administrators of Iowa, despite the 30 percent allocation to property tax relief.

“Through the legislative process, what we came to realize was it was either going to be 30 percent or nothing at all,” he said. “If you step back and say, ‘Gee, we sure wish we’d gotten all that money,’ I would wish that, too. But I don’t think we should scoff at getting $14.5 billion over a 20-year period.”

Linn-Mar Community School District anticipates bonding against SAVE for construction projects, Superintendent Shannon Bisgard said, the first of which will likely be a new elementary school.

“It’s too early to know the specific amount of impact of the property tax amendment on our projects,” Bisgard said in an email. “ … In general we are pleased that SAVE passed the Legislature this year.”

SAVE’s extension dawdled in the Statehouse for multiple sessions as it neared its initial sunset of 2029 — a time frame short enough to impact school districts’ ability to issue bonds against it.

The Solon Community School District built two-thirds of a planned intermediate school by bonding against SAVE and opened the school in fall 2018. The district had planned to complete the building when the tax was extended.

But officials have had to reconsider. They will retire existing bonds against SAVE through 2029, Superintendent Davis Eidahl said in an email, before bonding farther in the future.

“We are going to wait until growth dictates the need,” Eidahl said.

l Comments: (319) 398-8330; molly.duffy@thegazette.com

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