Funding Education in Iowa

We are in an interesting predicament in the state of Iowa. A 2013 education bill (HF 215) has made several changes to education in Iowa, many of which I detailed in a post for my VanderCook class, Teaching Music in a Common Core Word. One of the changes from HF215 that I did not detail in the post is how education is funded within our state.

After the break is a detailed explanation of the new funding formula. To cut to the chase early, the Governor and the House have proposed a 1.25% rate of state supplemental aid. This is an inadequate amount of funding for our students. The Iowa Association of School Boards is advocating for 6%. The Senate has put forth a bill authorizing a rate of 4%.

For some more facts, the Iowa State Education Association has created an excellent infographic about state supplemental aid:

The biggest gap I see in the rhetoric coming from the Governor and other Iowa Republicans is in regards to the amounts of money being appropriated in the debates over the FY 2015 and 2016 budgets. The Governor’s education bill created a new Teacher Leadership Program, giving $50 million more dollars each year for the next three years to help fund new leadership positions for teachers within their own districts. While excellent opportunities for these teachers, this money cannot be used to hire new teachers, update technology, or purchase new supplies. This is money to supplement the salaries of teachers already employed in school districts.

With a rate of state supplemental aid below the average increase in cost of education, schools will not be able to replace aging textbooks, update old technology, hire or keep teachers as their enrollment changes… Iowa needs to seriously consider its priorities in terms of the use of its tax dollars. Education appears to no longer be a priority. Instead, our Governor has made it clear his priority is summer tourism and the Iowa State Fair.

Explanation of Iowa Educational Funding
Below is a graphic created by Iowa House Republican Research Analyst, Jason Chapman showing the new formula for school aid. This particular graphic shows how the district calculates funding for an individual student.

SchoolAidFormula

Working from the bottom up:

Iowa Code 257 says, “a school district shall cause to be levied each year, for the school general fund, a foundation property tax equal to five dollars and forty cents per thousand dollars of assessed valuation on all taxable property in the district.” The state then contributes the difference between this levy and the set 87.5% of the regular program state cost per pupil. This difference is paid from the state’s General Fund.

Quoting again from Iowa Code 257, Section 9 discusses the State Cost Per Pupil. The formula changed in FY 1992 (1992-93 school year) to the following: “the regular program state cost per pupil for a budget year is the regular program state cost per pupil for the base year plus the regular program supplemental state aid for the budget year.” The base year is defined in Section 2 as “the school year ending during the calendar year in which a budget is certified.”

I’ll use the 2013-2014 school year as an example. The FY 2013 state cost per pupil was $6,001. The allowable growth rate for that year was 2%. This means that the FY 2014 state cost per pupil was 102% of $6,001 = $6,121. We can continue to follow this formula to get to this year:

Fiscal
Year
School
Year
State Cost
Per Pupil
Percent of Growth State
Supplemental
Aid
2013 2013-2014 $6,001 2% $120
2014 2014-2015 $6,121 4% $245
2015 2015-2016 $6366 1.25%  $80

So according to Iowa Code, schools receive 87.5% of their regular program state cost per pupil from their uniform levy of $5.40 per $1,000 of assessed valuation on all taxable property in the district and from the state’s General Fund. For FY 2014, this amounted to $5,356. This money comes in monthly payments on or around the 15th of every month beginning in September and ending in June.

Iowa Code 257 also requires district to levy additional property taxes to fund for various other programs from the remaining 12.5% of school aid:

  • Teacher Salary
  • Professional Development
  • Early Intervention
  • Teacher Leadership
  • Area Education Agency Teacher Salary
  • Area Education Agency Professional Development

Prior to FY 2014, allowable growth increased the additional property taxes in this 12.5%. In his 2013 Education Reform Bill (HF 215), Governor Branstad changed this formula. Now, the 12.5% of additional property taxes is frozen and will begin to shrink as property tax relief is given for state supplemental aid rate causing the rise in state cost per pupil (SCCP).

State Supplemental Aid (SSA) has replaced Allowable Growth. This rate will increase the amount of money in the blue section of the above graphic. In other words, because the rate of SSA increases the SCCP, it will also increase the 87.5% foundation that the state supplies from the uniform levy and the General Fund.

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