Iowa House sends 2% school funding increase to Gov. Kim Reynolds

DES MOINES — General state funding to Iowa’s public K-12 schools will increase 2 percent next school year under an agreement reached by Statehouse Republicans that’s headed to Gov. Kim Reynolds for her signature.

Senate File 167 increases the per-pupil funding for K-12 students by $162 from the current year to $7,988. That includes a $5 bump in addition to the percentage increase to address disparities in the actual amount of funding a school district receives per student. The total amount can vary between districts due to a variety of factors, including historical funding practices and property tax revenue — leading to some districts receiving more per-pupil funding than others.

The bill also raises the cap on operational sharing, providing an additional roughly $942,000 to support and allow more administrative staff to be shared between small school districts, and provides a 5 percent increase to the rate of funding per student for rural districts that encounter larger transportation costs.

It also extends for another year property tax relief in which the state freezes local property tax dollars that go to the increase in per-pupil spending, amounting to $136.7 million, and includes funding for the second year of a two-year phase-in to raise the starting salary for new teachers to $50,000 for the 2025-26 school year.

“(That’s) additional funding that puts real money into the pockets of the educators who shape our kid’s lives,” said Rep. Dan Gehlbach, R-Urbandale, the bill’s floor manager.

  Buy Photo

Taken all together, the bill provides nearly $106 million in new money, for a total increase of 2.8 percent, for K-12 public schools in the state, according to House Republicans’ staff analysis.

The proposal passed the House 60-36, with six Republicans joining Democrats in voting against. Democrats argued it is insufficient to help districts cover costs, including for rising health and property insurance rates, and falls below the cost of inflation.

“Once again, House and Senate Republicans are holding our public schools in survival mode,” Rep. Heather Matson, D-Ankeny said.

  Buy Photo

House and Senate Democrats proposed a 5 percent increase in school funding, but it was voted down. Republicans argued that the 2 percent increase is sustainable and a responsible way to fund schools.

“Under Republican leadership in Iowa, we’ve delivered responsible and sustainable increases to education year after year, with a focus on stability and student success,” Gehlbach said.

House Democrats and the Iowa State Education Association say per-pupil allocations haven't kept up with inflation for years, and also point to state-funded savings accounts for private school expenses as a reason why public school districts like Des Moines and Iowa City have been forced to cut millions of dollars from their budgets.

ISEA, a union that represents tens of thousands of public school educators in the state, said schools require at least a 5 percent funding increase to maintain manageable class sizes, offer competitive salaries that attract and retain quality teachers and provide essential support staff, including counselors and nurses.

“If state leaders believe that spending more than $1 billion over the next three years on private school vouchers, which serve only a fraction of our students, is a good idea, then increasing funding for the majority of our students in public schools should also be their priority,” ISEA President Joshua Brown said in a statement. “Setting SSA at 2 percent is not the answer.”

  Buy Photo

In approving the educational savings accounts for families of private school students, lawmakers made an unlimited appropriation — meaning all students who are approved under the program are eligible for nearly $8,000 in state funding, the same amount the state will spend per student at Iowa’s K-12 public schools.

The program expands to universal eligibility for all Iowa students beginning next school year — allowing all Iowa K-12 students attending accredited non-public schools to participate, regardless of household income.

House Minority Leader Jennifer Konfrst, D-Windsor Heights, argued the plan amounts to a large windfall for private schools, while public schools struggle.

From 1973, when the current public school funding formula was created, until 2010, general state funding to K-12 public schools increased by an annual average of 5 percent. Since Republicans regained at least partial control of the state lawmaking process in 2011, that annual increase has averaged 2 percent.

“At some point the floor will fall out,” Matson said. “Well, I want better for my kids and every kid across Iowa.”

Gehlbach argues Republicans, since retaining control of the state’s legislative agenda beginning in 2017, have made education a priority.

“Over the past eight years, we've increased K-12 funding by more than $1 billion,” he said. “ … We've raised per-pupil spending every year while balancing the state budget and delivering tax relief for Iowans.”

The House approval comes after lengthy negotiations between House and Senate Republicans and more than seven weeks past a self-imposed deadline. Legislators are required by state law to set state K-12 school funding within 30 days of the governor’s budget presentation. There is no penalty, however, for not meeting the deadline.

Iowa public schools must certify their budgets by April 15, and already have published the plan and held public hearings to approve spending levels and property tax rates for next school year.

Rep. Larry McBurney, D-Urbandale, said the 2 percent state funding increase will lead to property tax increases in many Iowa communities.

House Democrats said nearly half of Iowa public school districts likely will need to raise property taxes to meet a guaranteed 1 percent budget increase, as the state funding increase won't cover the full amount. Iowa law guarantees that school districts' budgets will increase by at least 1 percent over the previous year.

Under the proposal, 159 districts will be on what is known as the "budget guarantee," a process for increasing property taxes when school districts’ funding obligations cannot be met by increasing per-pupil funding alone. It occurs when a district is experiencing an enrollment decline that outpaces the percentage increase in state supplemental aid.

  Buy Photo

“I was hoping in that in two months our House Republicans could negotiate a little bit harder with the Senate Republicans, but it appears as though all it took was two months for them to ultimately cave to what the Senate Republicans wanted,” McBurney said. “And now we are stuck in a position where many of our school districts, at least half of them, are going to be looking at raising property tax rates."

Gehlbach pushed back against Democrats’ criticisms, saying “House Republicans didn’t just accept the first offer on the table, we fought for more.”

Senate Republicans initially proposed a 2 percent per-pupil increase with no additional funding, matching Reynolds’ budget proposal. House Republicans proposed a slightly higher 2.25 percent increase, alongside other funding components — some of which made it into the final bill.

“This plan isn’t everything we initially voted on, but it’s a hard-fought victory that moves us forward, and I’m proud of the work our leadership did to get this across the finish line,” Gehlbach said.

He said there will be more school funding discussions yet this session as lawmakers work on crafting next year’s state budget, saying he hopes to secure a $14 million standing appropriation for paying paraeducators in Iowa’s K-12 school system.

Comments: (319) 398-8499; tom.barton@thegazette.com