Reynolds urged to veto spending cut to Iowa agencies serving students with disabilities

Iowa Gov. Kim Reynolds on Tuesday said she still is reviewing — but may likely sign — a bill that would reduce funding to Iowa agencies that provide special education services to Iowa students in public and private schools.

Iowa’s nine Area Education Agencies would see a nearly $30 million decrease in the upcoming fiscal year that begins July 1 as the result of cuts passed by the Legislature.

Lawmakers passed Senate File 578, commonly known as the "standings" bill, which includes a $7.5 million annual cut required by law as well as an additional $22 million reduction agreed on by Republican lawmakers.

That is $5 million more than lawmakers cut to the agencies last year, according to a fiscal analysis by the nonpartisan Legislative Services Agency.

However, even with the reduction, Rep. Taylor Collins, a Republican from Mediapolis, said all but one Area Education Agency in the state will still receive more money than last year, thanks to the state's 3 percent increase in state supplemental aid to public schools. The Mississippi Bend AEA will see a $32,000 reduction, likely due to a declining student population, Collins told reporters.

The reduction continues years of budget decreases to the agencies.

Democrats argue Republicans are intentionally underfunding education in Iowa, noting the state has a nearly $2 billion general fund budget surplus, full cash reserves and a Taxpayer Relief Fund projected to total nearly $3.4 billion by the end of next fiscal year.

The roughly $8.5 billion budget approved by lawmakers represents 88 percent of the state's ongoing revenue. That's a 3.7 percent increase over the current budget, but leaves roughly $1 billion in projected revenue unspent that will go to reserve funds. By state law, lawmakers cannot spend more than 99 percent of projected revenues.

The reduction comes amid anticipated growth in special education needs among private schools that the agencies will need to address.

John Speer, chief administrator of the Grant Wood Area Education Agency in Cedar Rapids, said AEAs expect an increase in students with special needs attending private schools because of a law passed this year that will allow parents to use taxpayer-funded education savings accounts to send their student to private schools.

Iowa law entitles students in private schools the right to special education services in the same manner provided to public school students.

If students who require special education services move to a private school, their AEA is required to provide the services — but are not compensated by the state for doing so. The state’s funding formula compensates AEAs only for services offered to public school students.

Iowa’s AEA system serves about 69,000 Iowa students ages 3 to 21 that have individualized education plans meant to ensure that a child with an identified disability receives specialized instruction and appropriate services. Another roughly 2,500 students up to 2 years old also receive special education services through the state's AEAs, Speer said.

“About 75 percent of what we do is in the area of special education services,” Speer said. The Grant Wood AEA supports more than 72,000 students in public and accredited non-public schools in Benton, Cedar, Iowa, Johnson, Jones, Linn and Washington counties.

“That will disperse staff. Students will be more spread out than they are now,” Speer said of anticipated growth in private school special education needs. “That will make it harder to reach students and will put a stress on our staff” and hinder the AEAs ability to “deliver services as efficiently as we’re normally able to.”

Speer said he is hopeful lawmakers will take up a bill next year to adjust the funding formula to compensate the AEAs for services offered to private school students.

Sen. Tim Kraayenbrink, a Republican from Fort Dodge who chairs the Senate Appropriations Committee, has said he is open to changing the formula to compensate AEAs that serve private school students.

In the meantime, Speer said Grant Wood AEA is bracing for a roughly $640,000 funding shortfall that means holding off on filling open positions and possible service impacts.

While Grant Wood AEA will receive $160,000 more in funding than the previous year, the agency had been expecting $800,000 more based on the 3 percent increase in public school funding. The agency was required by law to set its budget and issue staff contracts before the legislative cuts were announced.

To fill the gap, Speer said Grant Wood will not fill a handful of open as well as some new positions the agency had planned on hiring.

Speer said Iowa schools — both public and private — are “clamoring for support” to meet the increasing demand for special education services for students, including supporting students with mental health needs.

“Our districts really need support in this area,” Speer said. “Special needs is in every one of their top three categories of pressing needs among the school districts we support. … This is the place you would least want to cut funds” that serve the state’s most vulnerable students.

Sen. Janet Petersen, D-Des Moines, on Tuesday called on Reynolds to issue a line-item veto on the cuts.

“Iowans should be outraged,” Petersen said in a statement, urging Iowans to call the governor’s office “and let her know that our AEAs provide vital services to Iowa’s kids who need it most.”

“Taking away millions of dollars from our children’s special education services in every region of the state to pay for her new private school voucher program is wrong,” Petersen said. “Governor Reynolds should veto the cut. … If the state can afford $107 million to subsidize exclusive private schools, it can also afford $22 million to ensure quality special education services continue in every Iowa community.”

Reynolds, speaking to reporters Tuesday, said she still is reviewing the bill, but noted AEAs will still see an increase of funding because of Iowa's 3 percent increase in state supplemental aid to public schools.

“I truly don't believe, if we decide to move forward and sign the bill that that will impact their ability to provide the services at the local level,” Reynolds said. “We appreciate what they do, and we don't foresee any delays in the services that they provide to school districts. So (I) feel confident in that.“

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

Caleb McCullough of The Gazette-Lee Des Moines Bureau contributed.