- Gretchen Tegeler is president of the Taxpayers Association of Central Iowa
Suppose you set up an automatic withdrawal from your checking account to fulfill a five-year pledge you made to a capital campaign for your church; or to construct the Botanical Center’s outdoor gardens; or to build the University of Iowa’s new Children’s Hospital. In each case it would be something of enduring value – something that will benefit future generations. During these five years, your gift happens automatically each month, and each year, without having to be re-evaluated against other wants and needs in your household budget.
Now imagine it is five years later, and you have just received a notice in the mail asking you to sign and return a form for a five-year renewal. Would you just go ahead and sign it and send it back, or would you ask some questions first?
For example, would you ask:
(1) What has been accomplished with the original funds? Is the project completed?
(2) What is the remaining need, or what is the new need going forward?
(3) Does this cause remain the top priority that it has been before, given the things that have changed in your family over the past five years? What if you now have to pay for long-term care for a family member, for instance?
Most of us would ask the questions before renewing a major commitment. However, in the world of public policy, these questions are too often not asked. Renewal is assumed. Best example: K-12 school infrastructure funding.
For all the value there was in kicking off a conversation about water quality funding, the proposal to extend the sales tax after 2029 and use a tiny share of it for water quality improvement meant there was never a discussion of whether the sales tax for school infrastructure even needed to be renewed.
The discussion went straight to “us” versus “them;” education versus environment; the idea that it is somehow wrong to even dare to propose any change. But the questions need to be asked and the discussion needs to be had. It’s a huge amount of money, and its renewal deserves deliberate, thoughtful consideration.
First some background. In 2008 the Iowa Legislature dedicated a full one-cent increase in the sales tax to fund K-12 school infrastructure needs for 20 years, through 2029(1).
This amounts to about $440 million per year – which is HUGE in the overall scheme of things: large enough that in any given year it could build the equivalent of at least five metro nitrate treatment plants; four brand new metro-scale hospitals; at least ten Iowa Supreme Court buildings; or renovate the State Historical Building as proposed five times over.
Just seven years in, the impact has already been substantial. Looking around the metro area, it’s amazing to see the transformation that has taken place over the past several years.
The Des Moines Schools Central Academy building at Grand and Fleur was once an eyesore, but now is gleaming and beautiful. Des Moines elementary schools, some of which are over 100 years old, look better now than they have in my 60-year lifetime.
In the West Des Moines district, every school has been updated to current code; its high school has been substantially upgraded and expanded, and the Valley High School Staplin Performing Arts Center is a new $15 million, 1,200-seat state-of-the art facility that any metropolitan city, let alone a school district, would be proud to call its own. Iowa students are very fortunate, and I am so pleased that our generation has stepped up to make it happen.
If all of this has been accomplished in just seven years (albeit using future revenue in many cases), it’s exciting to imagine what might yet be done in the next 13 years. But what will be left to do after that, in the following 20 years? What will remain to be done, so early in the remaining design life of the recently built or restored buildings? Might a 20-year $10 billion program be enough to sustain at least several generations of schoolchildren before a program of such substantial size is needed again?
Our organization held a program at the Staplin Performing Arts Center and the audience was surprised to learn about how education funds are so “siloed.” West Des Moines needed to make budget cuts at the same time it was opening the new performing arts center. As this legislative session ends, more districts are looking at cuts in their operating budgets. Maybe there is a better way to reallocate resources within the education system. Or imagine directing these funds to other goals within education. For example, what if we decided to do whatever it takes to get every third grader reading at grade level? Don’t we want to opportunity to think about such possibilities in 2029?
Over 20 years, needs do change. Since the school infrastructure program was enacted, the State has expanded the Medicaid program to assure 100,000 more Iowans have access to health care. It is 90 percent funded by the federal government now, but that share will decline and the state share will grow. This will place a tremendous strain on resources in the future.
If the stock market experiences another downturn, pension costs will explode. It hard to imagine what the pressures for funding might be by 2029.
Or think about the far future, 2049, the final year of the proposed extension. Are we being presumptuous to think that we know better how to spend half a billion dollars per year in 2049 than will the generation of decision makers of the day? My 6-year-old granddaughter will be 39 years old by then, and may wish to make her own choices.
While it may be disappointing that funding for water quality improvements was not identified this year, it does provide an opportunity to ask the right questions and make a conscious decision before extending the largest targeted spending program in the State's history.
(1) One might wonder why the tax needs to be extended now, since it’s only 2016 and it runs through 2029. This is because school districts like to borrow money up front, and then repay the bonds with their annual share of the sales tax over a future period longer than the 14 years that are now left.