Rural Iowa schools are deeply committed to maintaining quality education, but they must continually navigate the fiscal pressures of shrinking enrollment and stagnant local tax bases. In some counties, a steady fiscal boost has arrived in the form of tax revenue from local wind energy projects, which can fund school facilities and other infrastructure improvements while also offering tax relief by lowering the general levy rate. Unfortunately, the strength of this tax benefit is largely misunderstood.

Iowa’s educational funding system equalizes per-pupil spending through the general fund, currently set at $7,988 per pupil, which means wind energy’s added property value wouldn’t increase the per pupil funding. Instead, it allows school districts to reduce the tax burden on local taxpayers by reducing the general levy rate. This effect is particularly notable for the Riceville Community School District, where 116 turbines contribute to one of the lowest total general tax rates out of 334 districts in the state.

School districts can receive additional funding through specific levies, such as the Management and PPEL funds. These funds are not capped per student and provide funds for facility improvements, technology purchases, and transportation. Nodaway Valley Community School District in Adair County receives $253,081 annually from 80 turbines. The extra funding helped the district address critical infrastructure needs by assisting with a $3.7 million HVAC system upgrade and paying for a four year lease for a bus.

The investment from wind turbine projects in rural areas of Iowa can provide pivotal funding for local schools and ease the tax burden on families. While the math behind the funding is complex, the impact on children and education is simple. By diversifying the tax base with renewable energy, communities are building a strong financial legacy without burdening local property owners.

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Tod Bowman is a policy associate at the Center for Rural Affairs. Established in 1973, the Center for Rural Affairs is a private, nonprofit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.