The Iowa House approved a bi-partisan plan to redistribute the one cent sales tax currently collected for schools on an equitable basis and provide $207 million in property tax relief over the next six years.
“Every student deserves a quality education in Iowa and the bill approved today will make school funding more equitable for students, especially in rural Iowa and property tax poor school districts. Over the next six years, the bill provides nearly $207 million in property tax relief for Iowa families, businesses, and farmers,” said State Representative Mike Reasoner of Creston.
House File 2066, which was approved on a 59-41 vote, replaces the current local option sales tax for school with a statewide sales tax to be used by schools for infrastructure and for property tax relief. Every county in Iowa already collects the extra sales tax, so the bill does not increase taxes. There are extreme inequities in the current system because schools in sales tax rich areas, like Polk County, receive up to $1396 per student while other school districts receive only $575 per student.
The bill approved today does not raise the sales tax for cars and trucks and ensures the money collected can only be spent for schools and property tax relief. The statewide sales tax will expire on December 31, 2029.
The bill now moves to the Senate.