Little hope for last-gasp effort to address Iowa school funding inequity

DES MOINES - An effort to permit school districts to spend reserve money to ease budgetary pain is on its last legislative leg.

Some state lawmakers still hope to pass a measure allowing school districts to tap into their cash reserves, but key legislators say any proposal is unlikely to pass the Iowa Legislature this year.

'You never say never, but I know it's an uphill battle at this point,” said Rep. Cindy Winckler, D-Davenport. 'We'll just keep working.”

One portion of Iowa's complex school funding formula sets varied per-pupil spending limits. Some districts are able to spend more than others - as much as $175 per student.

The issue gained attention when the superintendent of Davenport schools, Art Tate, pledged to use the district's cash reserves in fiscal 2017 to avoid layoffs. Such action would be a violation of state law, which could lead to Tate losing his license.

Tate said he plans to spend up to the state's highest per-pupil allowance, which would give him an additional $2.8 million - drawn out of the district's reserve of more than $20 million - to use in the general budget.

Tate said the extra money is needed to avoid laying off teachers and offset what many say are low state funding levels.

State lawmakers introduced a bill that would permit all schools to spend up to the highest per-pupil amount, but that proposal has been stopped.

All but roughly 20 of Iowa's school districts would be eligible to take advantage of the additional spending, if they chose.

Rep. Tom Sands, R-Wapello, chairman of the tax-writing House Ways and Means Committee, said he does not plan to advance the bill this year.

Sands said he and other lawmakers are concerned permitting districts to use their reserves ultimately will result in property tax increases when those districts eventually refill the reserve accounts.

'When I dove into it, it's hard to write the bill that doesn't have a property tax increase implication,” Sands said. 'To maintain the reserves, (districts) have to go to the property taxpayers.”

Sands also said he would prefer to address multiple issues in the school funding formula at the same time. Another example he noted is districts that have to spend more on transportation and thus have less money for educational uses.

With Sands' decision to stop the proposal, its only hope is through alternate legislative channels.

Winckler said there are plans to introduce the proposal as an amendment to the House's standing appropriations bill.

But that is a long shot without the support of a majority of House Republicans, the majority party in the chamber.

'We're still working with individual legislators. I think that there's a huge misunderstanding about what the actual cost will be,” Winckler said. 'We're merely talking about spending authority. Not necessarily is there a reciprocal increase in taxes. …

'Granting spending authority is the equitable thing to do.”