Education Funding

Each year, one of the high profile issues for the legislature is to set “allowable growth” for K-12 education funding. The legislature determines what growth rate, if any, will be applied to the per-pupil funding amount.

Currently, K-12 education funding in Iowa is set at $5883 per enrolled pupil. When you hear proposals for 0%, 2% or 4% allowable growth, that percentage is what would be applied to that $5883 per-pupil amount.

State and local funding is broken down into three segments. The first portion of the $5883 is comprised of $5.40 per $1000 of valuation in local property taxes. The second portion comes from a direct state appropriation, which takes the funding up to 87.5% of the $5883 per pupil. The final 12.5% is finished off by additional local property taxes.

One implication of this formula is that “property rich” districts (e.g. West Des Moines) are able to meet a much greater part of the $5883 per pupil through local property tax than “property poor” districts. Conversely, many of these “property poor” areas need a much higher school property tax levy than schools in our area.

In the past, to keep growing government in difficult budget years, the legislature set an allowable growth rate, and then intentionally underfunded its share of the K-12 funding the following year. This underfunding pulled the rug out from under school districts, after they had already set their budgets.

Last year, with new leadership in the House, we fixed this practice of intentional underfunding, and appropriated over $200 million additional dollars to make up this shortfall from the year before, while at the same time allowable growth was set at zero.

This year, there seems to be some consensus at the Capitol for some amount of allowable growth, yet no agreement yet on the exact rate. I agree with many that it’s time for a modest increase in school funding, but with our economic future still uncertain, I think it’s prudent that we set a growth rate we know is sustainable. I also would like to see any new K-12 educational spending offset by reductions and efficiencies in other areas.

The education funding formula has also entered into the conversation on property tax reform. Part of the plan recently passed out of the House Ways and Means Committee provides that the state pick up the above mentioned third piece of funding, the final 12.5%, currently paid by local property taxes.

On the upside, this plan would provide direct relief to local property taxpayers, without impacting school funding at all. On the other hand, as explained above, our area would get less property tax relief than other communities that receive a greater share of state aid.

Education funding in Iowa is a complex issue that significantly impacts the entire state budget. We all want the best for our children, and I will continue to work toward an educational system that is respectful of taxpayers, while delivering value to families and our children.