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Iowa Grade School Budget:

How Much is Enough?

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In 1970, Iowa Legislature followed President Lyndon Johnson’s War on Poverty as he passed the Elementary and Secondary Education Act which stated that government would fund public schools. Up to this point (1950’s to 1960’s) public schools relied solely on the school’s district property taxes. In 1970 Iowa Legislature passed a formula that is used to this day to figure how much money each school district is allotted. However, there are many things that factor farther into schools’ budgets as the Legislature stated later (mainly in 1980’s). In the 1980’s Iowa Legislature decided that the government needed to allow further funding to districts who supported talented and gifted students, returning dropouts, special needs students and English language learning students. In 2013, Iowa Legislature decided it needed to fund schools who supported at-risk students and students of low socioeconomic status (those who usually qualify for free or reduced lunch at school) more. Each of the previous categories adds to the number of pupils or, as they say, add weight to a school’s budget but, while the categories might add weight for the cost per pupil, they never count as a full student. What they do is take the weighted total and multiple that by the districts cost per pupil to add further funding to that district’s budget. A districts budget is mainly comprised of three things: local or uniform levy (property taxes), state aid (state and income taxes) and additional levy (miscellaneous taxes set by the city).

While some districts can rely on just their property taxes, all the school districts felt their belt tighten quite a bit when in the time frame of 2000 to 2009, the United States fell into economic distress which caused the first cut back in Iowa Education. Funding was cut back by 4.3% during this time but the United States started to look up again so 10% of the previously cut budget was reinstated. In 2010 there was another cut back in education but this time, Iowa’s budget had to be cut by 10% across the board. Iowa’s educational budget has since then been slowly growing (usually by about 1% or less per year) but for some this is not fast enough.

Republicans held a majority in Iowa government during this point in time and stated that a large portion (40%) of Iowa’s budget is allocated for education and that the data shows this is suffice for now while Democrats and some public schools are stating that this is still not enough.

Republicans said that $713 million has been renewed to the Iowa education budget while they are holding budgets or cutting budgets in other areas of the government. Republicans also stated that teachers have increased by 3% and class sizes have only increased by 2.5%. However, the data also shows that school funding was at 45.8% of the state’s budget and fell to 40.7% once Republicans took the majority. The data also shows that funding for public schools has risen by less than 3% which has only happened a hand full of times in the last four decades and is low.

Democrats said that the schools are under-funded, and it shows based on increased class sizes and teacher and staff layoffs, which all affect students’ learning. Democrats are stating that Republicans data is off. Democrats data shows that the average class size is 19-20 students except for Kindergarten (whose class sizes average at almost 30), First and Second grade classes (who average more than 20) and Third grade (who average almost 22 students). Overall the class sizes may seem small but when broken down we can see how class sizes are growing individually. Also, Democrats are stating that many teachers who are included in the 3% increase the Republicans are boasting about should not be counted as they are not always in the classroom to teach and are instead out mentoring others on how to be better teachers.

Republicans were targeted in The Courier being accused of hating public schools due to under-funding. Dave Deyoe, Iowa State Representative, and Walt Rogers, Iowa State Representative, rebuttable stating that Iowa’s educational budget is at an all high and the budget issue is not as serious as anybody is making it out to be.

Many Democrats, public schools, and students feel the contrary. They are saying that the budget formula that was put together almost half a century ago is outdated and not fair. The formula used to calculate school districts budgets is as follows: State Cost Per Pupil for the previous fiscal year + Growth per pupil for previous fiscal year = State Cost Per Pupil for the upcoming fiscal year. The state cost per pupil number helps to calculate annual growth rate for schools and relies on two important numbers: the previous spending of that district and the previous per pupil growth amount. The previously laid out formula only gives the portion of state funding, it does not include community or district funding. The more money a district receives from property or state taxes the less state aid it receives for its schools but, each district is given the minimum of cost per pupil. I believe that Molly Duffy, writer for The Gazette, who paraphrases Kim Huckstadt, assistant professor at The University of Northern Iowa says it best:

“The discrepancies have persisted since the formula’s creation because school districts were funding students at different levels in the 1970’s. When legislators picked a funding level in the middle to be the state’s minimum per-pupil cost, the districts spending less than that level received more money. But those spending about it continued to spend at their original, higher levels.”

Duffy has written many articles pertaining to this subject and she puts it best when she says, “Students come in with so much money allocated to them.” Which based on research is true, for every student a school district has they receive that much more money in their budget. One student can mean an increase of up to $173 dollars compared to some other neighboring districts.

Duffy also wrote about the Davenport students who sued Iowa government for underfunding their school. Davenport received $74-$133 per student less than their neighboring districts which resulted in them having to cut many extra-curricular activities and increase their class sizes. The students (some previous some still enrolled) listed State of Iowa, the General Assembly, former Governor Terry Branstad and the Iowa Department of Education in their lawsuit as, “they had the ability to change things, but they chose not to”. An Iowa judge threw out the lawsuit since, the students stated the nearly 50-year-old formula impeded their fundamental right to a public education, by stating that at this point in time Iowa does not view a public education as a fundamental right. Chase Cartee represented the students and told Duffy that they are considering appealing and believes this will be a case that will go all the way up to the Iowa Supreme Court before it is done.

Mackenzie Ryan, writer for the Des Moines Register, continues the story with Art Tate, superintendent at Davenport schools. Art Tate was taking money from their school’s reserves to fund school activities since their budget could not support it, which is illegal, and almost ended up with him losing his license. Tate told Ryan that he decided to work out the numbers one night to see just how much money Davenport was missing out on with the gap per student ranging from $74-$133 with neighboring districts. In one year alone, the total gap for the whole budget was $2.7 million with the gap lasting for 40 years it totaled up to $140 million. Tate put his job on the line, but it pushed Iowa Legislatures to take a closer look at these gaps. The article ended with Iowa Legislature adding $5 per student to help pay for teachers and programs for schools. Iowa House Representative Walt Rogers and Governor Kim Reynolds say that it is a small start, but it is a start. Both have decided to push until the gap is gone.

A common fact I found while doing research is that many people familiar with the issues state it is not the state aid causing discrepancies in the budgets but instead the property taxes of school districts. To quote a PBS article dated from 2008, “It is this system (property taxes) that causes the most dramatic differences between states, and even with in districts”. Even the State of Iowa Department of Education is saying that the discrepancy lies in the property tax and not the state aid except they say that, “States districts that are property rich receive less state funding than those that are property poor,” mainly because districts that are property poor cannot raise enough money this way to keep their schools where they need to be for students. They stated this in their 2018 copy of Financing Public Education in Iowa on their website: educateiowa.gov.

However, Duffy wrote an article comparing two school districts that are in fairly close proximity to each other. In the article, Duffy refers to Des Moines’ Edmunds Elementary to Bettendorf’s Hopewell Elementary. In the article, it states that Edmunds receives more state aid since it has a higher at-risk student population, has more students who fall under Title 1 or No Child Left Behind Act, and almost all of their students qualify for free or reduced lunch (which is an indication of poverty in the school district). For the at-risk students alone, Edmunds receives an additional $1.5 million onto of their dropout prevention levy which is $14.1 million. While Bettendorf’s Hopewell Elementary receives more than Davenport, it does not receive $15.6 million more and their school district is set up just as well as Edmunds with lesser funds. Edmunds sometimes struggles with it students since they are at-risk while, according to Duffy, Hopewell’s students behave and rarely have outbursts. Duffy quoted an un-named University of Northern Iowa school finance expert when she said:

“…while that money helped educate all Des Moines students, including those with economic disadvantages at Edmunds, the reason behind the additional funds has little to do with a district’s financial need. There are no clear relationships between a district’s per-pupil funding level and its socioeconomic status, racial demographics or location.”

The gap between state funds vary widely across the state and districts, as said before, districts with the higher property tax receive much less in funding than those with lower property tax but now we must factor in all the categories from the first page of the report. On top of property taxes playing a role we have special education, English second language, at-risk students, returning or students who might drop out, and students of low socioeconomic status. These can add up to a large gap between districts, sometimes districts with these students receive upwards of $175 per student while those with higher property taxes receive the minimum allotted for their students even when some of these districts still have students who qualify for free or reduced lunch.

When Duffy quoted Kim Huckstadt, they said it best, “You’d think that, no matter where you are in this wonderful state, that each student would generate the same amount of funding. Well they don’t”. We can see in this quote how many people are unhappy with assigning numbers to our students and how unequal those numbers appear to be.

When this formula for coming up with the cost per pupil was first made it focused on equalizing taxation, making sure schools were spending money appropriately (no over or under funding), making a uniform state aid, and making budgets predictable, simple and pupil driven. While this formula can do great deals for school districts, it cannot help our Area Education Agencies who are losing millions each year.

Area Education Agencies (AEAs) are agencies that help support special need students in certain districts. While public schools are receiving cutbacks, so are our AEA. In 2012 alone, AEA’s funding was cut by $27.5 million and in 2013, AEA funding was dropped by $22.5 million. Not only is public education under attack but also the support public education needs to thrive.

An issue that is not getting a lot of attention right now is that school districts are having lower enrollment rates which is transitioning into less money for the schools. The state government is trying to help fund schools the best they can but if a school does not have the student body to keep it open, the government cannot do very much about it. State government is having to either close schools down entirely or consolidate schools together.

Since 1950, school closings and consolidations have been happening. In 1950, Iowa had 4,562 schools all funded by property taxes alone. Today, in 2018, we have 330 school districts with some of them very large. The larger districts are in the more rural part of Iowa while many of the smaller districts are in urbanized areas or city areas.

It is plain to see that there are discrepancies with the formula used to figure the cost per pupil but where these discrepancies lie are up to the individual. Students, teachers, and Democrats believe that it lies in the century old formula itself while politicians and professors keep saying the discrepancy is in the property tax. I believe it to be both.

The formula would work and would be fair if we did not add additional weight into special needs, at-risk, dropout programs, English second language, and socioeconomic students. I understand that we do this to provide the best we can for these students and want to give them the best education we can. However, this is where a large portion of the discrepancy in the buget alone are coming from. Figure for each at-risk student you are weighted an addition .22 of a student, if you have 10 students at-risk, they now qualify for an additional 22 students. If you are in a district where your cost per pupil is $173 (which is on the high end), your school district now has an additional $3,806. Even on the lower end with your cost per pupil being at $33, that is still an extra $726 that is allotted to your school district while others are receiving the state’s minimum. So, the question now becomes, how can we regulate this to make it fair? Surely the school districts who are not receiving this additional funding still have some students who fall into this category but whether or not they break the minimum required to have an additional weight added is another story. In some schools, if their student body who can receive free and reduced lunch is less than 12%, they are not allotted any additional money for at-risk students or any Title 1 funds. If we cannot regulate who receives these funds or how much is allotted per student (distribute it fairly) then there will always be this huge discrepancy in the budget.

The only other resolution to this issue dealing with the discrepancies in schools’ budgets would be is the state came in and regulated property taxes across the board for all the school districts. This would impose a problem as there are many people who do not want State government interfering with city government but also, some schools would lose a large portion of their funding. As was stated before, for cities or towns with high valued property, they receive less funds (but always the minimum) from state aid due to their property tax levy.

In summary, there is no good way to fix this problem. We can keep allotting more money to the state aid, we can look at how much weight is given to schools’ students in need, we can look into making sure that every school district with at least one student in need receives funding, we can look to regulate property taxes more but the truth is, to do any of the previously listed things requires hard cuts somewhere to some school district. I hear people talk about this subject as if it is simple to understand but, when looking at the big picture it is a lot more complicated than we originally perceive.

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