Senate sends school sales tax bill to Culver
By Dan Gearino Journal Des Moines Bureau | Posted: Wednesday, April 23, 2008
DES MOINES -- Ten years after the Legislature started the local option sales tax for schools, the Senate has given final approval to a plan that would make the 1-cent tax statewide.
The bill, passed 34-15, now heads to Gov. Chet Culver for an expected signature.
Sen. Mike Connolly, D-Dubuque, said the tax would level the playing field between retail-rich and retail-poor counties.
"All the children should have equal funding and stable funding," he said.
The changes to the tax are partly a result of its popularity. The school infrastructure local option tax, or SILO, has been approved by local voters in all 99 counties. The widespread acceptance has led to protests from rural residents who say they deserve a fair share of the proceeds.
The new proposal, once fully phased in, would give each county the same amount of money per student. The bill also removes the need for local reauthorization of the tax. The tax would continue until 2029, and then the Legislature would have the option to renew it.
School officials have said the plan's long timeframe will allow districts to use the money for long-term loans, which they can't do with the current tax.
Republican opponents said the removal of local approval increases the chances that the money will be used for non-educational purposes.
"We're going to take away the local vote that we promised constituents we represent. That is a bait and switch tactic on our local voters," said Sen. Jeff Angelo, R-Creston.
However, the bill says the money can only be used for school construction or property tax cuts.
Six Republicans voted for the bill, along with 28 Democrats.
One of those Republicans, Sen. Dave Mulder of Sioux Center said the bill is imperfect, but it is better than the current system.
"Could the money be scooped? I hope not; I pray not," he said.
Republicans attempted to amend the bill to increase the payments to school districts in a way that would retain county-based approval. The amendment was rejected 30-20.
Most taxpayers would notice no difference when the 1-cent local tax becomes a 1-cent state tax, raising $405 million per year.
The bill also increases the use tax by 1 cent, which applies to business purchases made out of state for in-state use. This is the only tax increase in the bill, because those purchases aren't currently subject to the county-based tax.
All of the $32 million in proceeds from the use tax increase will go into a special fund for property poor school districts. Sioux City and Des Moines would be the biggest beneficiaries.
"I'm proud to move this bill further to make sure every child and every taxpayer is treated more equitably," said Sen. Steve Warnstadt, D-Sioux City.
The SILO became law in 1998, backed by Sioux City legislators who wanted a way to improve school buildings without raising property taxes. The law initially said counties could keep all of their local proceeds from the tax.
In 2003, the Legislature changed the system to address concerns from rural areas. The revised law said counties could keep local proceeds for the first 10 years. Then, once voters re-authorize the tax, counties could only keep $575 per student. Any excess would be deposited into an account for distribution to poorer districts.
With the revision, the tax grew in popularity. As of last December, ithad been approved in all 99 counties and reauthorized for a second 10 years in 24 counties.
Connolly said the current proposal is the logical evolution for the tax. If it were fully phased in by next year, each district would get about $770 per student, a big increase for the districts that have hit the $575 cap and an even bigger increase for rural districts that are far below the cap. "That's the Iowa way -- equity in funding behind every child," Connolly said.
Dan Gearino can be reached at 515-243-0138 and dan.gearino@lee.net
Roll Call
Here is how Siouxland senators voted on the school sales tax bill:
Voting yes:
Steve Warnstadt, D-Sioux City; James Seymour, R-Woodbine; Dave Mulder, R-Sioux Center.
Voting no:
Steve Kettering, R-Lake View; Ron Wieck, R-Sioux City; David Johnson, R-Ocheyedan.
The bill, passed 34-15, now heads to Gov. Chet Culver for an expected signature.
Sen. Mike Connolly, D-Dubuque, said the tax would level the playing field between retail-rich and retail-poor counties.
"All the children should have equal funding and stable funding," he said.
The changes to the tax are partly a result of its popularity. The school infrastructure local option tax, or SILO, has been approved by local voters in all 99 counties. The widespread acceptance has led to protests from rural residents who say they deserve a fair share of the proceeds.
The new proposal, once fully phased in, would give each county the same amount of money per student. The bill also removes the need for local reauthorization of the tax. The tax would continue until 2029, and then the Legislature would have the option to renew it.
School officials have said the plan's long timeframe will allow districts to use the money for long-term loans, which they can't do with the current tax.
Republican opponents said the removal of local approval increases the chances that the money will be used for non-educational purposes.
"We're going to take away the local vote that we promised constituents we represent. That is a bait and switch tactic on our local voters," said Sen. Jeff Angelo, R-Creston.
However, the bill says the money can only be used for school construction or property tax cuts.
Six Republicans voted for the bill, along with 28 Democrats.
One of those Republicans, Sen. Dave Mulder of Sioux Center said the bill is imperfect, but it is better than the current system.
"Could the money be scooped? I hope not; I pray not," he said.
Republicans attempted to amend the bill to increase the payments to school districts in a way that would retain county-based approval. The amendment was rejected 30-20.
Most taxpayers would notice no difference when the 1-cent local tax becomes a 1-cent state tax, raising $405 million per year.
The bill also increases the use tax by 1 cent, which applies to business purchases made out of state for in-state use. This is the only tax increase in the bill, because those purchases aren't currently subject to the county-based tax.
All of the $32 million in proceeds from the use tax increase will go into a special fund for property poor school districts. Sioux City and Des Moines would be the biggest beneficiaries.
"I'm proud to move this bill further to make sure every child and every taxpayer is treated more equitably," said Sen. Steve Warnstadt, D-Sioux City.
The SILO became law in 1998, backed by Sioux City legislators who wanted a way to improve school buildings without raising property taxes. The law initially said counties could keep all of their local proceeds from the tax.
In 2003, the Legislature changed the system to address concerns from rural areas. The revised law said counties could keep local proceeds for the first 10 years. Then, once voters re-authorize the tax, counties could only keep $575 per student. Any excess would be deposited into an account for distribution to poorer districts.
With the revision, the tax grew in popularity. As of last December, ithad been approved in all 99 counties and reauthorized for a second 10 years in 24 counties.
Connolly said the current proposal is the logical evolution for the tax. If it were fully phased in by next year, each district would get about $770 per student, a big increase for the districts that have hit the $575 cap and an even bigger increase for rural districts that are far below the cap. "That's the Iowa way -- equity in funding behind every child," Connolly said.
Dan Gearino can be reached at 515-243-0138 and dan.gearino@lee.net
Roll Call
Here is how Siouxland senators voted on the school sales tax bill:
Voting yes:
Steve Warnstadt, D-Sioux City; James Seymour, R-Woodbine; Dave Mulder, R-Sioux Center.
Voting no:
Steve Kettering, R-Lake View; Ron Wieck, R-Sioux City; David Johnson, R-Ocheyedan.
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