Waterloo Cedar Falls Courier, IA
02/05/06
Voters to decide Tuesday if option tax will be
extended
By EMILY CHRISTENSEN and ANDREW WIND, Courier Staff Writers
WATERLOO --- Black Hawk County voters will decide Tuesday whether to add
another decade to a 1 percent local option sales tax for schools. The choice
arrives more than three years before the original tax expires.
Since the state began collecting the tax in October 1999, 12 school districts
partially or wholly within the county have received slightly more than $90 million.
Money is distributed to each district based on enrollment within the county,
usually to pay for school maintenance or construction. But if the extension is
approved Tuesday, a revision in state law means districts will receive a smaller
portion of tax revenues when the second 10 years begins in 2009.
The change funnels a portion of revenues into a statewide pool distributed in
counties with the tax on a per-student basis. The measure is intended to make
funding more equitable between rural and urban counties, where a higher
percentage of people spend their money. Voters in every Iowa county except
Linn and Johnson approved the 1 percent sales tax.
"This is a system that is probably fair for all the schools in the state," Union
Superintendent Neil Mullen said. "This tax is a very good way for the people to
provide schools for the students, and it seems to be much more acceptable to
the taxpayers than bonding for a project."
School officials have a rough idea of how much less they would receive in sales
tax revenues after entering the statewide pool, but amounts are adjusted
annually based on revenues.
Joel Gabrielson, program manager for local option taxes at the Iowa Department
of Revenue, said districts in the pool are guaranteed $575 per student. Black
Hawk County districts received about $860 per student during 2005, and
Gabrielson said they are receiving an estimated $926 per student this year.
For Waterloo Community Schools, the county's largest district, Superintendent
Dewitt Jones said that reduction "would total a couple of million less a year." The
district receives about $9 million now.
Cedar Falls Superintendent Dan Smith, whose district is the county's second-
largest, emphasized that even the reduced amount would provide a large benefit.
"That's still a substantial resource and when it's added to what we have already
been able to accomplish, it will go a long way," he said.
Dave Swenson, regional scientist in economics for Iowa State University,
estimates the 1 percent tax costs the average Black Hawk County household
about $224 each year. The estimate is based on surveys conducted by ISU and
reflects a family with $47,000 in disposable income.
Impact evident
Jones and Smith headed the effort last fall to bring the sales tax referendum
before voters because significant needs remain for facilities in their districts.
Passage of the referendum now would allow officials to begin planning.
The men discussed the issue with superintendents of other districts serving
students living in Black Hawk County. In October, the superintendents
recommended extending the sales tax to their boards of education, which all
approved the idea. The county's Board of Supervisors then authorized the
referendum.
Waterloo has collected $55 million in sales tax revenue since 1999. It was used
to build four elementaries and remodel or expand five other schools. In addition,
one elementary is being remodeled and plans are under way to build another.
The district plans to upgrade the remaining nine district schools within the first 10
years and to return to some that already benefited from the tax.
Cedar Falls collected more than $21 million, enabling the school board to
authorize construction of two elementaries and significant remodeling projects at
four other schools. Before the tax expires, Smith said, the district will also
complete projects at both junior highs and North Cedar Elementary.
Even districts receiving significantly smaller pieces of the pie made their money
stretch for students. And Dunkerton Superintendent Robert Cue noticed a
change in the spirit of the community since the option tax passed and the district
began improving its buildings.
Community members are benefiting from the projects, too. The district spent
some of its money building a gymnasium and installing an elevator. Cue said the
elevator allows students using wheelchairs greater accessibility and enables
family members who have a hard time navigating stairs to attend school
functions in the second-floor auditorium.
"Very little of this would have been able to be done without this money," Cue
said.
Officials countywide maintain addressing all building needs within the first 10
years won't be possible.
Before the 1999 vote, an audit of Waterloo's facilities showed a need for
infrastructure upgrades totaling $140 million, an amount that has since grown
because of rising construction costs. The option tax was never expected to raise
that much money in 10 years, though.
"Our most recent estimate shows we expect we'll get just over $97 million," said
Jim Langstraat, Waterloo's executive director of financial services.
"If it isn't renewed and we want to do something in every building, we won't be
able to do much," he said. "If it's passed, I think we're putting together a
committee again to look at all the needs, reprioritize them and go from there."
Minimal resistance
No organized opposition to the referendum has emerged, but the lack of an exact
plan beyond the first decade concerns Wendell Koch of Waterloo. The retiree
says he doesn't oppose the schools "in any way, shape or form," but he plans on
voting no Tuesday.
He worries Waterloo and Cedar Falls may not continue scheduling projects at the
same pace they receive money during the second 10 years of the sales tax. Both
districts pledged to use this pay-as-you-go approach during the first 10 years, but
want the option of borrowing money and completing construction projects more
quickly after 2009 because of much higher costs.
"Ten years down the road they'll be out of money and so they'll want more," Koch
said. "That's just the way politicians are. ... I just don't like to see the public get
snookered."
Many smaller districts had to bond for money on construction projects upfront
and use option tax revenues to pay the debt. Cue said the plan worked well in his
district, allowing administrators to capitalize on lower construction costs and
favorable interest rates. But it also means some payments may remain when this
tax expires.
If the tax is not renewed, Cue said, the Dunkerton district would have to look at
using physical plant and equipment levy funds to pay the debt. That could mean
fewer dollars for day-to-day maintenance needs and a maintenance log that
backs up.
"This is something that Dunkerton schools need. We can't generate all the funds
ourselves, and we are finding it hard to predict what the state is going to give us,"
Cue said. "We have already gone through a period of allowable growth being
subpar, and that will affect the kids in a negative way."
Gilbertville resident Tim Manatt has voiced opposition to the referendum for
another reason: Not all schools in the county benefit from the tax.
"I'm not against the tax, don't get me wrong," he said. "My concern is that it just
goes to public schools --- that private schools, parochial schools, don't receive
any of that."
State law doesn't allow the money to go to private schools. Manatt believes that
should change. He suggests a voucher system be set up to distribute money on
a per-student basis to those schools.
"It's been tremendous for the public schools, I don't deny that," Manatt said. "In
the meantime, we've got the Lutheran school and the Catholic schools struggling
to stay open, and in a lot of cases they aren't staying open."
ISU's Swenson noted another criticism of local option sales taxes is the larger
percentage of income they take from the poor.
"Those taxes fall much more heavily on lower-income people than on higherincome people. It's much more regressive," he said.
However, certain purchases are exempt from the tax including food, drugs,
gasoline, automobiles, hotel rooms and some farm equipment and supplies.
"The fact that food and prescription drugs are exempted, of course, that helps
offset some of the regressive effect," Swenson said. "But it does not take it
away."
All general election precincts will be open from 7 a.m. to 8 p.m. Tuesday. One
change is anticipated for Hoover Middle School. Voters will be directed to the
lobby of the main entrance because of a scheduling conflict in the auditorium.
Kyle Jensson, Black Hawk County election manager, said voter turnout was near
30 percent, or 11,387 voters, for the first school option tax vote in 1999. She
doesn't expect nearly as many voters to come out this time. The county sent out
271 absentee ballots, but Jensson said 130 are military and overseas ballots,
which are dispatched automatically.
Smith said districts are not running an aggressive campaign, which can result in
lower voter turnout. However, he isn't worrying too much about the final outcome.
"When our communities voted for the option tax in May 1999, that was a turning
point for our communities," he said. "We have seen the benefits of that in the last
five or six years. The communities are investing in the young people and in the
future. That sends a powerful message of what Black Hawk County is about."
Contact Emily Christensen at (319) 291-1520 or
emily.christensen@wcfcourier.com. Contact Andrew Wind at (319) 291-1507 or
andrew.wind@wcfcourier.com