State studied tapping other funds for teacher pay plan

CEDAR RAPIDS - State officials targeted school construction, property tax relief and professional development money to pay for a new teacher pay system that was to be the centerpiece of the state's education reform package.

Gov. Terry Branstad said last month that he won't pursue the new four-tiered pay system as part of education reform this legislative session because he wanted some more time to promote the changes and get people used to the idea.

Emails obtained through a Freedom of Information Act request show that in late October, however, the compensation package was still on the table and officials were trying to figure out how to get money from other state funds to pay for it.

In one email, Department of Education Director Jason Glass lays out five possible places the state could divert money and put it into the new pay proposal. One of the targets was the Secure an Advanced Vision for Education, or SAVE, fund, which he refers to by its former acronym of SILO.

“The SILO funds are some real money and we'd have to do some work to get at them. An argument can be made they are too flush, especially in rural/small districts who are also our worst in terms of pay. Letting this be used for salaries makes some strategic sense,” Glass wrote in an email sent to the account of Linda Fandel on Oct. 20. Fandel is the governor's special assistant for education policy.

In the email, Glass pegs the value of the fund at $380 million a year, but that getting at it might be tough.

“Would have a political fight from Master Builders, possibly tax groups, Farm Bureau. (The Iowa State Education Association) would be an ally,” he wrote.

Diverting the funds for teacher salaries, however, is exactly what lawmakers were worried about when they changed the School Infrastructure Local Option, or SILO, tax to the non-optional SAVE tax in 2008 and added a penny on every dollar worth of sales in the state.

Lawmakers included in the statute that the money collected should not be used for “any other purpose” than school infrastructure or property tax relief “unless the bill is approved by a vote of at least two-thirds of the members of both chambers of the General Assembly and is signed by the governor.”

The tax brought in $377 million in fiscal 2010 and $382.8 million in fiscal 2011, according to Department of Revenue figures.

Union response

Iowa State Education Association Executive Director Mary Jane Cobb said “any sort of assumption (of union support is) a mischaracterization” and she never discussed SAVE funding as a way to pay for teacher salaries with members of the administration.

“We have historically said that it might make sense to look at (using SAVE funds for salaries) in some of the rural districts that aren't growing as quickly,” she said.

That's similar to an argument Glass made in his Oct. 20 email and again last month when asked about it.

“I've been in seven states, and Iowa has some of the nicest, and best-maintained facilities I have seen anywhere, and that is important,” Glass said.

But, he said, repurposing tax revenue toward teacher salaries in districts that are losing population makes sense because they are not using the money to expand.

“Going into this, we said that everything has to be on the table,” Glass said. “In that email, we were laying out some of the options that might be available.”

Other options suggested in the email, and the associated amounts as determined by Department of Education staff, were:

•  Teacher quality, $3.5 million.
•  Professional development, $28 million.
• Class size, $30 million.
•  Teacher salary supplement, $250 million.

Glass writes, however, that the class size and teacher salary supplement money is “not easily repurposed - already in salaries.”

Chad Kleppe, director of public affairs and one of two lobbyists for the Master Builders trade association, said using SAVE funds for salaries wasn't the intention of the law, but the association's “goal is to work with the Governor's Office.”

How much?

State officials haven't said how much they expect the education reform package to cost the state, even without the teacher salary change.

Fandel said it wasn't cost that killed the teacher compensation package for this year, but it was one of a few reasons - including the timing of local union contracts and raising awareness about the new system - that led to its being taken out of the mix this year.

Now, she said, the administration is looking toward the December revenue estimates, which should give state officials a better idea of how much growth, if any, the state can expect in its tax funds. Those estimates are due on Dec. 15.