Senate panel raises K-12 state aid proposal to 3%, meeting House plan

Republican state senators on Wednesday raised their proposed increase for public K-12 school funding from 2% to 3% for the upcoming fiscal year, matching House Republicans’ proposal.

But Democratic lawmakers claimed that the single percentage point increase is just a measure to try to make up for some of the funding lost through a property tax error from previous years.

Initially, the Republican majorities in the Iowa House and Senate and governor each put forward different figures for increasing Iowa’s State Supplemental Aid, or SSA, for the 2024 fiscal year.

Gov. Kim Reynolds proposed increasing SSA funding by 2.5% in her budget proposal released in early January. Senate Republicans first released a proposed increase of just 2%, while the House GOP introduced and passed a 3% SSA funding increase through the Education Committee Tuesday.

In a Senate Education subcommittee meeting Wednesday, public school advocates argued that both the 2% and 3% increases were insufficient. Keeping up with the fixed costs of a school requires an average increase of 3% to 4% growth in SSA funding each year, Dave Daughton with School Administrators of Iowa and Rural School Advocates of Iowa said.

“But this isn’t a usual year,” Daughton said, citing the high rates of inflation over the summer. “… While some of the proposals are better in recent years, we still need to get a better SSA number in order to have our school districts get the type of aid they need to educate our children.”

Additionally, Sen. Sarah Trone Garriott, D-Windsor Heights, claimed Republican lawmakers only raised their SSA funding proposal to 3% to make up for the shortfall caused by the state’s move to correct a property tax error.

The state found an error in October in how it was calculating “rollback” rates for residential property based on a 2021 property tax change. The error would have resulted in Iowa residential property owners being overcharged $127 million. But school districts built that higher rate into their budgets and correcting it will leave them with about $21 million less in revenue.

The Senate approved a separate bill Wednesday aimed at fixing this error, moving Senate File 181 to the House for consideration.

Democrats said that legislation leaves Iowa cities, counties and school districts in a difficult position. Many local entities, including school districts, will have to make budget cuts to make up for the property tax funds they were expecting, Trone Garriott said, because the state did not inform them of its error.

The senator argued that the proposed school aid increase does not keep up with inflation and will not provide enough support to public schools that are facing a sudden, unexpected budget shortage because of the state error.

“We can do a lot better for our public schools, and we have the resources to really show up for them in a time of rising costs,” Trone Garriott said.

Sen. Tim Kraayenbrink, R-Fort Dodge, said he understands the situation happening in public schools, but that the 3% growth keeps in line with Republicans’ approach to budgeting.

“Our public schools are great and we want to support them every way we can,” Kraayenbrink said. “At the same time, we want to make sure that we’re continuing our conservative spending principles, that we’ve been pretty much locked into the last six or seven years.”

Republican lawmakers in the House Education Committee meeting disagreed with Democrats who said the Legislature underfunds Iowa public schools. Rep. Craig Johnson, R-Independence, said the 3% growth rate in House File 117 is a funding increase.

“This will be my seventh year now to increase public school funding,” Johnson said. “We have and will remain to be consistent with our funding. It’s predictable and it is affordable for Iowa. We’re also going to be on time this year and I appreciate that from all of you.”

State law requires lawmakers to pass per-pupil state aid for schools within the first 30 days of the legislative session.

The legislation would provide $106.8 million increase over the current fiscal year, Johnson said. It would also raise the state cost per pupil amount, which is what the state school aid formula is based on, by $222 from the previous year, to $7,635 per student.

Democrats and public school representatives said these figures can be misleading, and that a 3% SSA increase does not mean that each school district will get 3% more in state funding. Schools with declining enrollment rates will receive less money through this program, Rep. Tracy Ehlert, D-Cedar Rapids said.

“That will translate into potential small salary increases while we already have trouble filling positions, larger class sizes and fewer student supports as we’re still recovering from the pandemic,” Ehlert said.

The legislation will move next to the House and Senate appropriations committees.