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New Statewide Penny Tax To Benefit Emmetsburg Schools

By Staff | May 27, 2008

Good news for rural schools was highlighted during the May 19 meeting of the Board of Education of Emmetsburg Community Schools. The board members learned how the SILO (School Infrastructure Local Option sales tax) of one penny had been replaced by a statewide penny sales tax.

All schools in Iowa–both urban and rural–will now receive the same amount of money per student for school improvement projects thanks to the passage of House File 2663. The Senate passed the statewide penny sales tax in April, and Governor Chet Culver signed his name to the legislation in May. The action sets Iowa’s sales tax at six percent and uses the extra penny on every dollar spent in Iowa for the funding of school modernization and improvement. By setting the sales tax at six percent, school districts can expect, on average, to receive an extra $200 per student.

“This was exciting news,” said Superintendent John Joynt. “It wasn’t easy. The legislators started nine years ago to pass it statewide.”

An added benefit to the legislation is that it will provide property tax relief for Iowans. According to the Governor’s Office, the new law states that any unused funds, in addition to taxes collected on goods purchased out of state and shipped to Iowa, may go into the Property Tax Equity and Relief Fund. It is estimated that $32 million will be available for property tax relief each year.

In light of the new statewide penny sales tax, the superintendent said that he wanted to discuss the possible construction of preschool rooms at West Elementary with the Facilities Committee.

“Starting July 1, our first check will be larger than it has been in the past,” said Joynt. “I had expected $365,000 of local option sales tax funding because they had a law which placed a cap on how much we could get. Now, I expect $81,476 more next year.”

Joynt explained that the increase will allow the statewide penny sales tax and Physical Plant & Equipment Levy (PPEL) dollars to take care of all of the bond payment.

“There’s no debt service tax next year,” Joynt noted. “We have an $8 million structure being built and there’s no extra tax for it. The board promised to do all that they could. We knew we had SILO money and we were hoping for a statewide tax. That’s happened now.”

Joynt added that as the years go by and more school districts come to the end of their voter-approved ten-year terms for SILO, those districts will join the state average and the overall income will increase.

“By 2014 we’ll have $195,635 more than we were planning–about $560,000. That will more than cover all of the bond payment which is $533,000 a year. We won’t have to use our PPEL to cover our bond payment.”

Those extra dollars may then be freed up for other uses, such as preschool classrooms at West Elementary.