Battle looms over school funding formula

A looming political skirmish over the future funding of K-12 education in Iowa might be the harbinger of bigger, high-stakes battles yet to come.

Disagreement between Republican forces led by Gov. Terry Branstad and Democrat lawmakers in concert with education interests likely will come to a head this week when the Iowa General Assembly faces a deadline set by state law that requires lawmakers and the governor to establish the funding level that per-pupil spending authority will be allowed to grow for public school districts in the future fiscal year nearly 18 months out.

Branstad appeared to up the ante even further on Friday when he told reporters he wants to scrap the current forward-funding system he championed in the 1990s and redoing the state's foundation aid formula to change the focus from spending levels to gearing resources in ways that will improve education and deliver better student achievement results.

He said what those changes may look like will rest with a yet-to-be appointed task force under the guidance of state education chief Jason Glass that is to report its finding back to him later this year.

“I think we need to get away from the old way that we've done things. We need to change the system and the system needs to focus on things that are going to get us results,” said Branstad, who held an education summit last summer that began the process of exploring a multiyear reform effort.

“We need to look at things differently,” he said.

Current state law says that “allowable growth” funding level for state aid and local property tax contributions for fiscal 2014 must be set within 30 days of the Legislature receiving the governor's budget plan - a deadline this session which will arrive on Thursday.

Different approaches

Legislative Democrats who hold a 26-24 majority in the Senate say they will abide by the law by approving a 4 percent increase for base per-pupil and “categorical” spending on Tuesday. If signed into law, that would commit the state to increase its state aid by $142.6 million for the school year slated to begin July 1, 2013, and to raise categorical funding for programs like class-size reduction and professional development by $14.6 million in fiscal 2014.

Republicans who hold a 60-40 edge in the House are taking a different tact by moving a bill through the House Education Committee that proposes an immediate modification of Iowa's forward-funding law that would change the current requirement to say the state K-12 education growth rates would be set in each odd-numbered year for the budget year beginning July 1 of the calendar year in which the statute is enacted and for the fiscal year that follows. The new deadline would be within 30 days of the date the governor submits a proposed two-year budget in each odd-numbered year.

The effect of House Study Bill 588 would be to push the next school funding decision into the 2013 session, since lawmakers last year agreed to no growth in K-12 state aid for the current year and a 2 percent growth rate in fiscal 2013. Lawmakers did provide schools with $215 million to “backfill” property taxes that were used to bridge lost state money due to a 10 percent spending cut that former Gov. Chet Culver ordered in October 2009 during the depths of a national recession that drastically reduced state tax collections that year.

Timeline worries

The idea of doing away with the forward-funding approach got significant push back from representatives of school administrators, school boards and teachers last week, who worried that they would face another tight timeline in fiscal 2014 to make funding, contract and classroom decisions in an atmosphere of uncertainty whirling around unknown reforms for a system that already has been whipsawed by policy and financing uncertainty in recent years.

“We think the two-year out cycle has worked very well,” said Emily Piper, a lobbyist representing the Iowa Association

of School Boards.

Brad Hudson, a lobbyist for the Iowa State Education Association, said the current arrangement was a compromise forged when K-12 funding was taken off “automatic pilot” via a formula tied to state revenue growth, inflation and other factors. He said Branstad's call for repealing the law now contradicts his insistence last year that the state budget be set on a biennial basis to provide more stability and predictability.

Rep. Jeremy Taylor, R-Sioux City, said the message he hears most from his local educators is they don't want to see the

state over-promise and under-deliver, which has been the case when the Legislature has had to reduce state aid after the advance funding level was set.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said it is unlikely Senate Democrats will go along with Branstad's call to repeal the forward-funding law. He said he planned to take up the allowable growth issue on Tuesday and pass a 4 percent increase for fiscal 2014 to the House.

“They may choose to break the law. We won't,” he said. “We'll abide by the law. If others choose not to, I can't force them to and I'm not going to waste a lot of time on that part of the equation. If they choose not to, so be it.”