Senate sends Culver school cash reserve bill

DES MOINES – The Senate Tuesday approved Gov. Chet Culver's proposal to require school districts to spend down cash reserves before seeking more taxes from property owners and sent it to him for his expected signature.

Senators passed House File 2030 by a 32-16 margin with Republican Sens. Larry Noble of Ankeny and Pat Ward of West Des Moines joining 30 majority Democrats in favoring the bill, while Sen. Swati Dandekar, D-Marion and 15 minority Republicans opposed the measure.

“This is about protecting the local taxpayers,” said Sen. Brian Schoenjahn, D-Arlington, the bill's floor manager.

However, Republicans charged the approach was choosing bureaucracy over democracy in taking away a local control decision in Iowa's K-12 school districts and placing it in the hands of the unelected School Budget Review Committee.

Senate Republican Leader Paul McKinley of Chariton said Democrats over-committed to Iowa schools in recent years and now were “pulling the rug out from under” local officials by cutting $227.2 million this fiscal year via Culver's 10 percent across-the-board state budget cut.

“Promises made, promises broken,” McKinley said. “There were a lot of school districts in good faith that set their budgets, hired people and settled contracts and said the state will keep its word, they will give us this money. Now we're coming in, the governor with his 10 percent across the board cut not only is breaking that promise, but we're foisting a large property tax increase on Iowans.”

According to preliminary data compiled by the nonpartisan Legislative Services Agency, the total undesignated and unreserved fund balance for K-12 school districts was $318.6 million in fiscal 2009. Schoenjahn said that was an “unusually high amount” that should be pared down before property taxpayers are asked to shoulder more education costs.

The legislation heading to Culver's desk would allow an expanded four-member School Budget Review Committee to work with local schools in deciding when districts' unexpended balances are excessive and how much should be used before local boards turn to property taxpayers for funding. The bill indicates that local school cash reserves not exceed 20 percent of general fund expenditures by fiscal 2012.

McKinley said a better approach would be to give school districts flexibility through fiscal 2012 to decide their spending priorities by suspending state mandates for teacher/librarians, guidance counselors and school nurses to free up $105 million, spreading preschool funding equally among all schools and giving them say over all categorical funding. That action would amount to $459 million yet this fiscal year and $490 million in fiscal 2011, he said.