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PPEL Vote Topic At Emmetsburg School Board Meeting

By Staff | Jul 23, 2009

The official sale of school land to Casey’s Corporation and a public vote on an existing tax to help keep property taxes down were discussed by members of the Emmetsburg Community Schools Board of Education during their monthly meeting on Monday evening.

“I recommend the board pass resolutions to authorize the sale and delivery of the deed and to allow the board president and board secretary to execute the quit claim deed conveying the [northern portion of the Middle School] property to Casey’s for the sum of $170,000,” said Superintendent John Joynt.

With unanimous approval by the board, the school district officially closed on the property (Lots 1 and 2 and the North 33 feet of even width of Lots 3 and 6 of Block 28, Corbin and Lawler Additions) on Tuesday, July 21.

In other business, Joynt explained to the board of the need to approve a resolution to allow the public to vote on continuing with the Physical Plant and Equipment Levy (PPEL).

“This is not a new tax, but a continuation of existing taxes,” Joynt said. “Half of our PPEL funds are used to pay off our construction project bond, so we do not have a Debt Service Tax. The voters voted $2.70 to build the addition and we raised taxes none after the first year.”

PPEL needs 50 percent plus one vote to pass. PPEL allows property tax up to $1.34.

“Now, our resolution says 67 cents, but the $1.34 is an important figure because that allows us to collect $352,547,” said Joynt. “The resolution doesn’t say $1.34 tax, it says 67 cents.”

Past school boards have chosen to practice property tax relief and put some of the levy on district patrons’ incomes by having an income tax surtax of five percent. The idea is that many of the school district’s patrons are retired and have property, but no income. The surtax spreads the levy to all income-earning patrons, including renters.

The five percent surtax is projected to bring in $175,744. The board may set the amount of surtax, and past boards have used five percent because it was approximately half of the amount collected. Iowa law limits surtax amounts to no more than 20 percent. Currently, the school district has a surtax for PPEL of five percent and an instructional support levy surtax of seven percent for a total of 12 percent.

“Because the surtax brings in $175,744 , our property tax asking will only be for $176,803, which is 67 cents per thousand,” explained Joynt. “The two tax initiatives combine to reach the total allowed by the $1.34 target of $352,547.”

Past school boards have pledged approximately half of PPEL funds to make payments on the general obligation bond. With half of PPEL funds and all of Local Option Sales Tax funds going to pay off the general obligation bond, there is no need for a Debt Service Tax.

“Without the voter approved PPEL, property taxes would actually increase,” Joynt noted. “The current 67 cents of property tax portion of PPEL would be moved to Debt Service and the board would have to pass the board allowed 33 cents per thousand, and then we would eliminate the income surtax.”

Joynt continued, “So, we rely on PPEL to pay the general obligation bond and buy buses, make repairs, and other things. If property tax becomes a big issue, the board has the authority to lower the property tax and increase the surtax.”

The superintendent recommended a public vote on PPEL in the fall.

“By doing this at the Sept. 8, school board election, we save a lot of money by not holding a special election,” Joynt surmised.