On Feb. 7, Glenwood Community School District voters will have an opportunity to vote on a new Revenue Purpose Statement directing the school district's spending of its 1-cent sales tax revenues.
The Glenwood Board of Directors voted 4-1 to pass a resolution at its monthly board meeting Monday approving the district’s new Revenue Purpose Statement, which states how the district will use the sales tax funds generated by the 1-cent sales tax. The vote will not impact sales taxes but rather it will give the district permission to use existing funds, according to Glenwood Superintendent Devin Embray.
“The revenue purpose statement is a permission statement for the use of the 1-cent sales tax monies,” Embray said. “It’s basically language that provides us the avenue to spend the dollars that come into the district. We obviously want to be good fiscal managers of that money as well as good stewards of it.”
The district's existing 1-cent sales tax came as a result of a 2008 legislative change in school financing that saw the Local Option Sales Tax (SILO) converted to a sixth penny of state sales tax on retail purchases to benefit students in all Iowa school districts. The new program, dubbed the Advanced Vision for Education (SAVE) Fund, extended the 1-center sales tax stream from its original expiration date in 2022 to Dec. 31, 2029, and also required districts to determine how they plan to spend the sales tax money and communicate that intention to their patrons via special election.
“We told the community that if we passed the ISL (Instructional Support Levy) we would be reducing their taxes because we would spend $200,000 of this fund’s money towards the property tax portion of the ISL so they would not see a tax increase on property,” Embray said. “We’re committed to that and our finances show we are doing that. It’s a way to spend down on our debt as well as being able to provide funding for necessary projects for capital improvements and building upkeep.”
The revenue purpose statement must follow Iowa law and can only be used for school infrastructure improvement or debt service. In past years, Glenwood had applied $1.9 million toward the new high school, resurfaced the high school track, installed new playground equipment, provided computer improvements around the district and remodeled Northeast Elementary, in addition to increasing the amount of funds earmarked for debt service from $86,000 to $286,000.
The district hopes to apply future funds to make heating and air conditioning improvements at Glenwood Middle School and Northeast Elementary, increase security measures at West Elementary and further improve technology district wide.
Without a current, voter- approved revenue purpose statement the district’s 1-cent sales tax monies would all go to debt service reduction until the entire debt is paid. The district has estimated its debts will not be paid until 2025, meaning until that debt is paid, all district maintenance and repair projects, as well as technology purchases, would have to be paid for from the general fund or be shelved altogether. About 80 percent of the general fund is earmarked for employee salaries and benefits. If the revenue purpose statement fails to garner more than 50 percent of voter support, Embray said the district could be prevented from making facility or technology improvements for many years.
“Most of the projects we have planned would have to be delayed or put on hold,” Embray said. “If we don't have this in place, we estimated we won’t be out of debt until 2025, so everything between now and then would have to be a general fund expenditure or from our unspent balance, which is a fund we want to be careful of because it’s the district’s rainy day fund.”
The school district plans to conduct a public forum prior to the Feb. 7 vote to discuss the revenue purpose statement.