Local-option tax good for Ames, bad for ISU students
September 20, 1999
It doesn’t take a life-long resident to recognize that Ames is growing rapidly. And with rapid growth comes more children, all of whom need primary and secondary education.
Schools in all seven districts of Story County are experiencing growth and are in need of infrastructure help.
Buildings get old and need repairs, and they can only be added onto so many times before new buildings become inevitable needs.
The county always has paid for infrastructure needs through property taxes. Currently about half of Ames’ property tax revenue goes toward the school system.
The more property Ames develops, the more tax revenue results from it. But that apparently isn’t enough — the superintendents of the seven districts (Ames, Nevada, Roland-Story, Colo-NESCO, Gilbert, Ballard and Collins-Maxwell) have joined forces to propose a 1 percent local-option sales tax, with the revenue solely dedicated to infrastructure costs.
If passed on the suggested Feb. 15 election date, the tax would increase Story County’s sale tax by 1 percent, raising it from 6 to 7 percent in Ames, and would last for 10 years.
According to state figures reported in Friday’s Ames Tribune, the tax in 1998 would have generated $6,460,250.
Ames Superintendent R. Nick Johns said Ames residents will pay more tax dollars for school improvements whether through the sales tax or higher property taxes.
He said only 60 percent of the sales tax revenue in the county comes from people living in the area, so out-of-county residents would help pay for school improvements.
But therein lies the problem with allocating sales tax revenue to the school district. Why should people who don’t live here pay for the local kids to go to school?
Districts like Ames and Nevada already have plans to spend their share of the sales tax money.
The top story in Friday’s Tribune reported that the Ames school district’s long-range committee has decided Ames should build a new high school and turn the current building at 1921 Ames High Drive into the town’s only middle school. Estimated cost: $50 million.
Nevada’s district has plans of its own, contemplating a new elementary school, according to the top story in the latest issue of the Nevada Journal. Estimated cost: $6.1 million.
This story actually cites projected revenue from the 1-cent sales tax as the source of the project’s funding. The district expects $9.5 million over 10 years, $5 million of which would be allocated to the new elementary building.
While these improvements may be necessary, the mode of payment is not. Ames already has a 1 percent local-option sales tax — raising the city’s tax to 7 percent is too big of a jump.
The 1 percent addition passed in 1986 is a permanent measure, 60 percent of which goes toward property tax relief, and 40 percent to community betterment, including human services and arts agencies, according to the city’s finance department.
This portion of Ames’ sales tax makes sense, because the money benefits all Ames residents — everyone pays property tax in some way. Even visitors are helped by the tax because the community betterment projects serve them as well.
The new 1 percent tax would benefit only those Ames residents with children in the school system. Although the same argument could be made about a property tax increase, at least outsiders and some ISU students aren’t made to pay.
Story County already gets a better deal than other counties. ISU students pay property taxes, whether they own property, rent or live in the dorms where the city is compensated by the state government for university properties.
ISU students generally don’t have children in the community school system, so the county gets a disproportionately high amount of property tax revenue compared to the number of children enrolled in schools.
Des Moines school districts tried recently to push through a 1 percent local-option sales tax and voters defeated it because they thought 6 percent total sales tax would be too much.
Raising the number to 7 percent in Ames is definitely over the heads of rural Midwestern shoppers. Sales tax figures like that are more typical of big cities like Chicago or Los Angeles; Iowa’s largest city thinks 6 percent is too high.
Before Story County superintendents get too caught up in dreaming about how to spend the additional sales tax revenue, they need to take a realistic look at how strong the opposition is going to be.
If 40 percent of the money spent in Ames is laid down by non-residents, most of them probably live in Story County communities surrounding Ames.
It makes no sense to make them pay two-fold and make students invest in a future that is not theirs.
Carrie Tett is a junior in journalism and mass communication from Ames. She is news editor and beat coordinator for the Daily.