IOWA LEGISLATURE

Pandemic impact on enrollment, achievement complicates Iowa school funding

AP Illustration/Peter Hamlin
AP Illustration/Peter Hamlin
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There was a time when Iowa lawmakers took up funding for K-12 schools in the first month of each legislative session to highlight the priority Iowans place on education.

That was changed a few years ago, giving legislators more time to get a better handle on state finances before making a decision on one of the largest slices of the general fund budget pie. The argument for the change was that allocating nearly half of the state’s general fund budget for K-12 schools said more about the importance of education than the timing of the appropriation.

This year, about $3.4 billion — nearly 44 percent of the Iowa’s $7.77 billion general fund budget — is going to K-12 education.

When the Iowa Legislature convenes Monday, the school funding challenge will be made more difficult by the impact COVID-19 has had on school finances, enrollment and student achievement.

Given those challenges, the Iowa Association of School Boards is asking legislators to provide “at a minimum” $90 million in new funding, according to its lobbyist, Phil Jeneary.

That would be nearly the same size bump as the roughly $100 million increase for 327 K-12 school districts the GOP-controlled Legislature approved in 2020.

Rather than asking for a specific dollar amount or percentage increase, the School Administrators of Iowa wants the Legislature to approve an increase in supplemental school aid to “mirror the projected growth in state revenues,” according to David Wilkerson, the association’s lobbyist.

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“The state’s reserve funds are full, and despite the pandemic, the state finished the most recent fiscal year with a $305 million surplus on top of a $289 million surplus in fiscal 2019,” he said.

Those numbers have the Urban Education Network and Rural School Advocates of Iowa aiming high.

“The rate of increase in SSA should be no lower than anticipated growth in state revenue,” which, based on a Revenue Estimating Conference projection in October was 4.1 percent, the Rural School Advocates said in its legislative goals. Regardless of revenue estimates, the group said, the increase should be no less than 3.75 percent for fiscal 2022 because of the “abundant” budget surplus.

A 4 percent increase would give schools another $90 million, according to the Legislative Services Agency. There are a variety of other funding mechanisms, such as transportation and special education, that also factor into school finances.

“The rate of SSA should keep up with other economic factors such as personal income or state gross domestic product over the long term,” the rural schools group said.

Research data gathered by Rural School Advocates say Iowa’s gross domestic product grew 20 percent between 2011 and 2017, but the state cost per pupil grew 14 percent without controlling for inflation, which means the actual gap is wider. Iowans’ personal per capita income increased nearly 32 percent from 2010 to 2018, it said.

House Speaker Pat Grassley, R-New Hartford, predicted it will be harder than usual to determine the appropriate SSA increase. State aid is determined on a per-pupil basis and enrollment is expected to drop by about 6,000 in the next school year.

Even a 2 percent hike, Grassley said, won’t generate the revenue growth needed to avoid more school districts being on what’s known as the budget guarantee, which increases local property tax burdens.

Margaret Buckton, lobbyist for the Rural School Advocates and Urban Education Network, explained that no increase in supplemental aid likely would mean 256, or 80 percent, of school districts would be on the budget guarantee. At 2 percent, that number drops to 163 and at 4 percent it’s 76.

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The problem is further complicated by COVID-19’s impact on school enrollment, said Senate Minority Leader Zach Wahls, D-Coralville.

He’s referring to what Wilkerson calls parents “redshirting” their children rather than send them to kindergarten in a pandemic.

“There’s been a huge decrease because a lot of parents have got their kids home, a lot of kids haven’t started kindergarten,” Wahls said. “So you’ve got a completely out-of-whack picture of enrollment for the next the next year.

“One of the things that we absolutely have to do is to create a mechanism to deliver SSA for 2022 that uses the enrollment number in a normal year, not in a pandemic year,” he said.

The school board association is asking lawmakers to use one-time money from the state reserve accounts to hold districts harmless from what its members believe is a temporary drop in enrollment.

Many districts reported large drops in prekindergarten enrollment, Buckton said.

“So if COVID-19 is behind us and most people are vaccinated, we fully expect those students to enroll in preschool” in the summer of 2021, Buckton said. Many schools will have “abnormally” large kindergarten classes with the 5-year-olds — some who are attending pre-K this year and others who are at home, plus 6-year-olds whose parents are keeping them home, she said.

There’s also a concern about “COVID-19 slide” due to the loss of instructional time in spring 2020 combined with the challenges of the various virtual, in-person and hybrid learning models being used this school year, Jeneary said.

The school board association will ask for two years of additional resources to help schools address that achievement issue.

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The Urban Education Network data shows the greatest learning loss has been among low-income students, “so it would also be a great time to discuss adding a poverty factor to the Iowa School Finance Formula,” Buckton said.

Comments: (319) 398-8375; james.lynch@thegazette.com

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