Frequently referred to as PPEL, this property tax is used by a majority of school districts amounting to hundreds of millions of dollars each year to pay for infrastructure.

Purpose of PPEL

In Iowa, a PPEL (Physical Plant and Equipment Levy) is a property tax used by most school districts to spend on infrastructure and equipment, including:

• School building construction, repairs, and maintenance
• Purchase of technology and equipment
• Transportation (e.g., school buses)
• Safety and security improvements

For more information on the specific details of PPEL, click here.

Types of PPEL

There are two types of PPEL levies:

1. Regular or Board-Approved PPEL – School boards can impose this levy without voter approval, up to $0.33 per $1,000 of assessed property value. It must be reinstated annually.
2. Voter-Approved PPEL – Requires voter approval and can be levied up to $1.34 per $1,000 of assessed property value for up to ten years.

A district may use either or both levies, but funds cannot be used for general expenses such as salaries, benefits, or insurance costs.

How the PPEL is Funded

The board-approved PPEL is funded exclusively through property taxes. When a voter-approved PPEL is in place, the district can collect it in one of two ways: either entirely from property taxes or through a combination of property taxes and an income surtax. In Iowa, an income surtax is an additional tax applied to a taxpayer’s state income tax liability, not their taxable income. Many school boards use this surtax to help reduce the property tax burden while funding the PPEL.

Example:

• If a school district has a taxable valuation of $150 million and levies the full $1.34 per $1,000, the maximum Voted PPEL revenue would be $201,000 ($150 million ÷ 1,000 × $1.34).
• If the district uses an income surtax and sets it at 3%, generating $165,000, the remaining $36,000 would be collected through property taxes.
• The total amount cannot exceed the $201,000 maximum, whether funded entirely by property taxes or a mix of surtax and property tax.

If an income surtax is used, it will be specified on the ballot and must be levied in whole 1% increments, with a minimum of 1% per fiscal year. The remaining amount is collected through property taxes. The combined revenue from the income surtax and property taxes cannot exceed the total amount the levy would generate if funded entirely by property taxes. The school board may adjust the income surtax percentage each fiscal year, with the property tax portion automatically increasing or decreasing to compensate.

District-Specific Information

Statewide, the total amount of dollars collected from the PPEL amounted to more than $330 million for fiscal year 2026. Broken down by the two types of PPELs, the board-approved PPEL generated $79 million while the voted-PPEL generated $252.6 million.

There are 101 school districts choosing to utilize an income surtax for their Voter-Approved PPEL. Statewide, the income surtax for the voted-PPEL generated $15.2 million with rates ranging from 1% to 17%.

Find your District’s PPEL Information

The Iowa Department of Management reports on all school district finances each year. Below is a table that shows the FY 2026 Physical Plant and Equipment Levy details, including Voter-Approved PPEL, Board-Approved PPEL, property tax rates, and income surtax percentages for all school districts.