Iowa Senate Democrats want 4 percent growth for schools in next fiscal year

'Modest' boost in base funding would lead to about $134 million in state aid

DES MOINES – Senate Democrats announced Thursday that they would be seeking a 4 percent increase in base funding for K-12 schools for the fiscal year beginning on July 1.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, called the 4 percent “allowable growth” increase a “modest” boost that would translate into about $134 million in state aid from the general fund for the fiscal 2014 budgeting year. Majority Senate Democrats also propose taking $38.5 million from the state’s special taxpayer trust fund account to cover the property tax implications of a 4 percent boost in state aid -- $16 million to cover the 12.5 percent property tax share under the school aid formula and another $22 million to address tax inequities between “property-rich” and “property-poor” school districts.

“The state’s reserve and rainy day funds are overflowing,” said Senate President Pam Jochum, D-Dubuque. “After several years of tight budgets, it is simply not true that the state can’t do more to help pay for basic school needs like textbooks, heating classrooms and paying salaries. We can do more for education and we can do it without increasing property taxes.”

In a meeting with the Sioux City Journal’s editorial board Thursday, Branstad did not offer an opinion on the Senate Democrats’ proposal but said the proposal to tap the taxpayer relief account to cover the property tax piece of the allowable growth formula would be a non-starter.

“This is going nowhere with House Republicans,” he said.

Branstad said with a split-control Legislature he wants to be productive and not try to set up situations where the two chambers pick fights. The governor said he’s “trying to be realistic about the art of the possible.”

Shawn Snyder of the Legislative Services Agency said a 4 percent allowable growth would boost per-pupil funding by $240 -- from the current $6,001 per student to $6,241 in fiscal 2014. He calculated the cost to the state’s general fund would be about $136 million and the property tax share would be $42.4 million under the foundation aid formula. He said the Democrats’ property tax proposal would cover all but about $3.4 million from the state’s taxpayer account.

Iowa education forward-funding law requires lawmakers to set the “allowable growth” rate nearly 18 months in advance after they receive the governor’s recommendations. Gronstal said he expects the Senate to complete work on the 4 percent allowable growth proposal for fiscal 2014 by the end of January and then proceed to finalizing the growth rate for fiscal 2015. He said his 26-member caucus has not decided what percentage increase to request for the 2014-15 school year.

House Democratic Leader Kevin McCarthy, D-Des Moines, said minority Democrats in the House have not discussed their allowable growth recommendations but he expected they would support at least a 4 percent increase for fiscal 2014. He said it was imperative that the General Assembly move quickly because Iowa’s 348 school districts are finalizing their budget decisions and may have to start sending out “pink slips” to teachers and other personnel if there is no certainty soon in how much state money they can expect to fund the next school year.

House Speaker Kraig Paulsen, R-Hiawatha, said at first blush the 4 percent growth rate that Senate Democrats are proposing for K-12 schools in fiscal 2014 does not seem sustainable for future years.

“That’s a lot of money,” he told reporters. “That would be difficult to carry forward.”

Earlier this week, Gov. Terry Branstad  detailed a five-year, $187 million education reform proposal that would increase pay for new educators – from a minimum of $28,000 to a minimum of $35,000 in the next five years – and redo career paths for teachers previously approved in 2001 but never adequately funded. He hoped the changes would garner the respect the teaching profession deserves but he signaled that he expects lawmakers to approve the reforms before talks turn to education spending. To that end, he did not include any new money in his fiscal 2014 budget proposal to fund “allowable growth” for K-12 schools.

That did not sit well with House Democratic Leader Kevin McCarthy, D-Des Moines, who took the governor’s remarks as a “my-way-or-the-highway” ultimatum. He said having the GOP governor “trying to bully” legislators is not helpful when it appears that he will need support from Democrats to pass his education reform package in a House where Republicans hold a 53-46 majority.

Paulsen rebutted McCarthy’s comments by saying he didn’t take the governor’s budget plan or Condition of the State speech remarks as an ultimatum. The speaker said Branstad made a “reasonable” request for improving Iowa’s education system and he hoped lawmakers would address it “in an expedient fashion.” He said it was Democrats who remain “dug in” on their property tax relief position and have made critical comments on the governor’s proposals to provide property tax relief and education reform.

Paulsen said he expected a House subcommittee would begin work next week on the governor’s education reform plan while Gronstal said Senate Democrats planned to move forward on the allowable growth issue, adding “it’s time for the state of Iowa to step up and do the right thing for Iowa’s students.”

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