Besides being the first bill introduced in the Eighty-First General Assembly, House File 1 was also the first bill to gain passage by both the Iowa House and Senate (unanimously in the Senate and 99-1 in the House). HF 1 authorizes a four percent increase, or an additional $100 million in spending for K-12 education in fiscal year 2007, which will give school districts an additional $197 to spend on each pupil. Also, since most legislators agree that education funding is their top priority, it was appropriate that HF 1 was the first bill passed in the Legislature this session.
This is the second year in a row the Legislature has committed to a four percent increase in education spending. Passage of this bill brings the total amount of state dollars spent on K-12 education to over $2 billion. This makes up 45 percent of state general fund spending, which is more than any other state-funded program. With passage of the latest four percent increase, the school funding formula statewide will generate an additional billion dollars through local property taxes.
Passage of this legislation does not address continuation of other state funding streams for K-12 education. Referred to as “categorical funding”, these pots of money are given to school districts for spending on specific purposes or programs. Two examples of categorical spending would be a state appropriation of $30 million for class size/reading intervention and $47 million for teacher quality/teacher compensation programs. Continuation of these programs is still to be considered, as well as new initiatives. One suggested new initiative by the Governor is a pre-school/early childhood initiative. This could be structured as categorical funding.
The State’s funding streams for education are primarily provided by state income and sales taxes. As previously mentioned, the school aid formula also requires a certain amount of local property taxes (approximately $1 billion statewide). Additional special property tax levies are decided by local school boards for providing money for both school program and infrastructure needs. This would include the Physical Plant and Equipment Levy (recently increased by a vote of Ankeny residents), the Instructional Support Levy (used for additional school program needs), a Management Levy (usually used for health insurance and retirement benefits), and any Debt Service a school district’s voters have approved. Finally, the Local Option Sales Tax is voted on a county-wide basis and must be used for infrastructure needs and equipment. This is funded by the sixth penny of sales tax.
Some legislators wanted to amend HF 1 to increase school funding to six percent. I do not believe this would have been a wise decision. The commitment for the increase is being made two years ahead of when it will be appropriated. No one is certain of what state revenues will be that far into the future. I am uncomfortable even committing to a four percent increase without better information on growth of future tax revenues, but Iowa law requires the Legislature to set allowable growth that far ahead. So if we estimate wrong we will have to fit it into the budget when we reach that point. If the rate of estimated growth is set too high and revenues do come in at a lower rate, the Governor is then forced to enact across-the-board spending cuts mid-way through a budgeting year. This indeed happened in 2001 and 2003, which caused many school districts hardship. Determining the appropriate level for allowable growth two years out is difficult. Finally, because the Legislature still has many other funding decisions to make, including the additional funding streams for K-12 education mentioned above, a decision for four percent growth is probably a better choice.
As always, please contact me at:
E-mail: carmine.boal@legis.state.ia.us
Home Address: 3301 SW Timber Green Road, Ankeny
Home Phone: 964-3335 · Capitol Phone: 281-3238
Christian Coalition of Iowa does not endorse any candidate or political party.
Our goal is to provide the public with information with which to make informed decisions.
CCI | Contact Us | Contribute Today | Our Mission | Home
CCI Events |
Newsletter Sign-up |E:mail
Sign-up
Surveys |Election
Results | Candidate Watch |
Voter Information