Below is a letter from former school board members in the House Republican Caucus sent to school board members across the state:
Education leaders,
Thank you for your input on school decisions before the legislature – the perspectives that you share with legislators help us do better work for Iowans at the capitol. Many of you have expressed your frustrations with what’s been happening in Des Moines lately regarding the school start date and funding. You have every right to be frustrated. As former school board members, we have experienced similar frustrations.
We understand the critical roles our local schools play in our communities and in the development of children. Our teachers are more than just teachers; they’re mentors, friends. Our principals are more than just principals; they’re counselors. Those of us from rural Iowa know that our schools are the lifeblood of our small towns; they are the glue that holds us together. Together we are all facing these difficulties.
Living within your means is a shared Iowa value. It forms the foundation of every discussion in the Iowa House on budgetary matters. That includes the discussion over Supplemental State Aid. We are listening to your concerns regarding the House approved level of 1.25 percent. We have heard your fears about the effects a 1.25 increase could have on class size, teachers, per pupil spending levels.
While some say we’re unwilling to put more money towards education, House Republicans have supported even higher increases in the past. In fact, it was only two years ago we supported 4 percent supplemental state aid. The driving factor in that decision was that the state revenue was there to fulfill that commitment. Our proposed 1.25 percent increase in aid isn’t derived from some malicious need to punish schools or some secret plan to shut down rural Iowa. Those charges are obnoxious and ridiculous. School funding levels, like everything in the state’s budget is about the money, or lack thereof.
As you know, the Revenue Estimating Committee (REC) outlined a specific projection at their meeting on March 19th. The legislature is required to use that estimate. This new estimate for Fiscal Year 2016 is $7.175 billion. Last year (FY 15) the state spent $6.995 billion. Simple math tells us there is $180.9 million of revenue above what was spent last year. That is 2.6 percent growth. While the state budget is complicated, the constraints legislators must operate within isn’t. It is simple math.
You may have been told that the state is experiencing 6 percent revenue growth, instead of the 2.6 percent outlined above, and simple math tells you a 4 percent supplemental state aid level easily fits. This is false and misleading. Last spring, the REC’s revenue estimate for Fiscal Year 2015 was $6.983 billion. Actual spending for FY 2015 was $6.959 billion. When the legislature adjourned last May, we had approved a spending level just under the estimate. Then economic factors worsened and ACTUAL revenue dropped but spending levels did not, leaving the state in a position where expenditures exceeded revenue. The latest estimate for Fiscal Year 2015 final revenue is $6.767 billion. The new Fiscal Year 2016 estimate is 2.6 percent more than actual spending and 6 percent higher than the current Fiscal Year 2015 estimate. That FY 2015 estimate is irrelevant since the actual FY 15 spending level was higher.
I’m sure you know by now, our current proposal combined with teacher leadership dollars is a $100 million commitment, over half of the $180.9 million in new revenue to K-12 schools. The rest of Iowans’ priorities like Medicaid, economic development and public safety have to fit within the remaining $80.9 million in new revenue. The increase in Medicaid alone is projected at over $200 million. It’s easy to see the problem.
A 4 percent increase in funding ($210 million) has no regard for the state’s projected revenue numbers. Simple math tells you: that’s more than the state can afford. Some say, “Fund schools then figure out the rest of the state budget.” This kind of short-term thinking without considering what the state can actually afford is the same type of haphazard budgeting that led to the crippling of school funding and across the board cuts in the past.
Even further, there are some who are now advocating the Legislature take money from the state’s reserve account to address what they perceive as a funding “emergency.” The reserves were tapped during two periods of time over the past 20 years; the first, during Fiscal Year 2001, when revenue growth was just $60.9 million. The state was experiencing the effects of the end of the dot-com bubble and also a precipitous drop in hog prices impacting Iowa livestock producers. The reserves were also used in FY 2002 when revenue dropped $16.5 million, FY 2003 when it dropped another $128.5 million, and FY 2004 when growth was $82.2 million. This period was during the recession in the aftermath of the September 11th terrorist attacks.
Fiscal Year 2009 was the next time the reserve funds were tapped, when revenue fell by $190.4 million as a result of the start of the great recession and the aftermath of the 2008 floods. Fiscal Year 2010 saw General Fund revenue drop another $300.1 million. FY 15 increase of $180.9 million does not constitute an emergency.
Furthermore, tax revenue does not come in at a steady rate. The state receives the largest share of tax revenue in the last few months of the fiscal year. In the 1980’s, the state did not have a cash reserve fund and payments to schools, local governments, and service providers were not made on time. Sometimes schools were forced to borrow money to make payroll as they waited for school aid payments from the state. Schools were forced to incur additional costs because of the state’s lack of fiscal responsibility.
When the Legislature decided to reform the budget process in the early 1990’s, one of the key elements was ensuring that payments were made in a timely manner. That’s the purpose of the Cash Reserve Fund. It has an amount equal to 7.5 percent of that year’s budget to help cash flow the state during the year. Right now, the state holds $522.3 million in this fund. I’m sure you would agree that it is important for the state to maintain the Cash Reserve Fund so that your school gets its state aid payments on time, instead of your district having to borrow money like back in the 1980’s.
Finally, many of you have been told that the state is sitting on a $1 billion surplus. Again, this is false. Back in 2013 the state had an ending balance of roughly $900 million. Since then that revenue has been used to pay off state debt, invest key infrastructure projects at our Regents institutions, and improve water quality. The ending balance is estimated to be $420 million at the end of Fiscal Year 2015 on June 30. Once money from this source is spent it is not automatically replenished. That means using it for on-going expenses like school aid this year forces all of you into the unenviable position of having to cut all of that money out of your budgets next year. Why? Because the state will no longer have a source to continue providing your schools that funding.
Short term decisions which are contrary to available data rarely result in long term success. Saddling the folks in our communities with higher taxes and more debt is a destructive financial course for our local schools and taxpayers.
We know how hard you’re working and understand your frustrations. That said, in Des Moines we’ve gone to work to ensure K-12 funding is getting the first (and biggest) bite of the apple. The problem is the apple isn’t as big as we’d hoped.
Respectfully,
Rep. Mike Sexton
Rockwell City-Lytton School Board 2004-2014
Served as President
Rep. Tedd Gassman
Thompson School Board 1983-1996
Served as President
Rep. Lee Hein
Monticello School Board 2000-2009
Served as President
Rep. Ron Jorgensen
Sioux City School Board 2002-2008
Served as President
Rep. Larry Sheets
Moulton-Udell School Board 2010-2012
Now, that was a interesting read. Those of you who have questioned Upmeyer’s update should read this. I think it answers your questions. There is no more money available and by law they can not spend what they do not have.
But that won’t stop the local school folks in Mason City from crying that they don’t have enough money.
However, any bets on whether or not there will be enough for Administrator raises in Mason City?
We are a mediocre school district at best. And I think we can be mediocre for a lot less money.
@Anonymous-I completely agree with you. The Mason City Schools are very, very top heavy. I don’t really know how that happened. It seems every secretary hs o have a secretary or assistant. It is way past time to cut the fat. Every year there are less and less kids in school but they demand more and more money. Cutting their money back just might force them to do what they should be doing. But they just demand ore and more. I would start by cutting our over priced superintendent.
I know how it happened. No one ever stops them or oversees what the admin does, how they spend the $. The Globe only reports what the district wants it to report. There is no accountability. They have created job after job for admins, six figure makers. They should have hired good teachers. The state needs to intervene, in my opinion, and audit the place with a fine tooth comb.
@Matt-Now that would be interesting. How can we make it happen?
@LVS…You can make things happen by running for the school board. Seriously, it takes people who want to make a difference and who aren’t afraid to make the hard decisions.
Once you come out of your shell and stop being so shy, I think you’d make a great candidate. 🙂
@Buzz-In my experience it takes more than one person to make a difference. One person just becomes frustrated because nothing will be accomplished. They have the board so stacked it would be impossible to achieve anything.