Branstad: Extended Iowa school funding increases would avoid budget ‘torture test’

DES MOINES - The split-control Legislature should set state education funding increases for the next two fiscal years before they adjourn the 2015 session so Iowa's school districts don't have to endure another 'torture test” next year, Gov. Terry Branstad said Tuesday.

Branstad said he was 'encouraged” that majority Republicans in the Iowa House and majority Democrats in the Iowa Senate appeared headed toward a budget resolution that would provide $7.17 billion in state general funds to operate government next fiscal year and target another $125 million in one-time surplus money for education, Medicaid services and other priorities.

'We always reserve judgment until we see bills in their final form,” the governor said of the budget compromise being finalized at the Statehouse. However, he said he did not want to see lawmakers walk away from the fiscal 2017 funding issue for K-12 schools this year after House and Senate negotiators indicated the could not reach agreement in that area.

'We don't want to have another year like this year where they spend the whole year fighting over money,” Branstad insisted. 'That needs to be done. They need to come to an agreement. School districts should not be put through this again next year. This is a torture test and it's not fair to them. We need to let them know what to expect and what they're going to receive in terms of the supplemental state aid and it needs to be done this year.”

Branstad opened the 2015 session by proposing supplemental state aid to schools at 1.25 percent for fiscal 2016 and a 2.45 percent increase for fiscal 2017.

A tentative budget deal announced this week by House and Senate leaders calls for the 1.25 percent boost in base per-pupil funding and an extra $55.7 million in one-time surplus funds for the 336 K-12 public school districts that will be operating next school year. However, no agreement was reached on fiscal 2017 state aid to schools.

The Iowa House, conducting its first day of floor debate in several weeks Tuesday, voted 51-39 to approve 2 percent increases in both supplemental state aid and categorical funding for K-12 school districts in the 2017 fiscal year. Representatives also sent to the governor a separate bill that would provide more than $33 million in fiscal 2017 to backfill the local property tax share of school funding to ensure the growth was 100 percent state aid.

Rep. Cindy Winckler, D-Davenport, argued it would be better to change the school aid formula that divides school aid so 87.5 percent comes from the state and 12.5 percent comes from property tax revenue. Lawmakers in recent years have had the state pick up 100 percent of the cost, which Winckler said increases the state's financial obligation but does not benefit schools when the money goes to backfill property tax relief rather than educational functions.

Rep. Patti Ruff, D-McGregor, said lawmakers were 'putting the cart before the horse” by sending the property tax relief in Senate File 176 to the governor on a 72-18 vote before they finalized what the percentage of growth in supplemental state aid would be for fiscal 2017.

Majority Republicans followed the property tax vote with passage of the 2 percent growth rate for fiscal 2017.

Rep. Chuck Soderberg, R-LeMars, chairman of the House Appropriations Committee and floor manager, called the bill fair and prudent because legislators were 'flying blind” given that the state Revenue Estimating Conference has not yet set a growth projection for state tax collections in the fiscal year that begins July 1, 2016. Ruff countered by calling the fiscal 2017 funding level for schools inadequate and shameful for a chamber that passed 2.45 percent out of its education committee earlier this session.

House Speaker Kraig Paulsen, R-Hiawatha, said he hoped the Senate would take up the bill and concur, but that seems unlikely.

'Two percent? That's a non-starter,” said Senate Education Committee Chairman Herman Quirmbach, D-Ames. Anything less than 4 percent, which the Senate approved, 'leaves schools high and dry,” he added.

'They're not serious about supporting public education, Quirmbach said.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, doubted the Senate would consider the House fiscal 2017 school aid bills before adjourning this year.

'We think the law is valid. The principle was that education gets the first bite of the state budget apple. That reflects Iowans'' priorities that we have a great public school education system,” Gronstal said. 'So, we think it was the right policy and because people want to make education last in line for budget decisions, we don't see a reason to go along with that.”

Since reaching a tentative budget deal last Friday, the Senate majority leader said efforts to craft the details within various budget pieces is progressing with about 90 percent of the work completed.

'We're making quite reasonable progress working through our differences,” Gronstal said. ' There are always a few wrinkles. I'd just say I'm a pretty good ironer.”

James Lynch contributed to this story.