After a bi-partisan 18-6 vote in the House Ways & Means Committee late Thursday, a plan to redistribute the one cent sales tax currently collected for schools on an equitable basis now moves to the House Floor. The plan also provides $24 million in property tax relief.
“Every county in Iowa already collects an extra penny sales tax for schools, but many schools districts, especially in rural Iowa, are at a severe disadvantage. The plan approved last night will equalize funding for schools to ensure every child gets their share of state resources. It will also provide significant property tax relief for Iowans,” said State Representative Mike Reasoner of Creston, who managed the bill to approval in Ways & Means.
House File 2066 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 was approved by the House Education Committee last month. The Ways & Means Committee made some significant changes to the bill by removing a controversial measure that raised the sales tax for cars and trucks, attached a December 31, 2029 expiration provision, and ensured the money collected can only be spent on schools and property tax relief.