Sen. Maggie Tinsman on state budget and education dollars

EDUCATION POSITION FOR 2004
3/13/04

With all of the commotion generated this spring pertaining to state governmentís support for public education, I believe an update would be most helpful to keep everyone abreast of what has been accomplished and some of the factors related to education funding that I personally feel important. First, and most importantly, the legislature has passed a bill to fully fund the 2% allowable growth for the ë04/í05 school year. In addition, the 2-1/2% cut last spring is restored. The two together represent a funding increase for education of $ 109,000,000. Secondly, funds required for the preservation of class size reduction dollars have also been allocated by the Senate. Finally, I am currently working on providing more flexibility in the rules pertaining to how Physical Plant and Equipment Levy Funds can be used.

With respect to the following year of 05/06, allowable growth was increased an additional 2%. As you are probably aware this bill was vetoed by the Governor.

I believe it is important that we all understand that since 1993 there has been a reduction in school enrollment of approximately 1.7%. During this same period, the state financial support of education from the General Fund has increased approximately 15% when adjusted for inflation since 1993. However, one should not get too alarmed at the mismatch between a 15% raise supporting a 1.7% decrease. Since the implementation of the Foundation Plan in 1972, state government has steadily increased the percent of the total cost of K-12 education with an equal dollar decline in local property tax that heretofore had been required for public education. During the period since 1980, property tax relief has also been accomplished by the state general fund by taking over the cost of the district court system and close to 50% of the support for mental health. These are major shifts from property tax to the general fund.

With respect to education, there is a certain degree of reorganization that must take place in order to be a good steward of public monies. We have inefficiencies in the form of guaranteed budgets for declining school districts, although beginning this year guarantees will phase out over 10 years. We have many very small districts that are both costly to financially support and provide inadequate education for our youth. Forced consolidation is not an attractive alternative at least to the extent of having the support of the majority of the Legislature. We must remember that Iowa has a rural dominated legislature that sees the loss of the local high school as accelerating the demise of the community. While the change in population demographics causes significant stress, it will not stop. These unnecessary costs must be corrected before just increasing dollars to continue our present system.

Today, 61% of the state general fund spending goes to education. This includes K-12, Community Colleges and the Board of Regents. On the other hand, Health and Human Services use 17%, the Justice System 11%, Economic Development 0.5%, Administration and Regulation 3%, and Property Tax Relief 6%. Both the Democratic and Republican caucuses are opposed to any increase in income tax or sales tax.

In recent years, there has been increasing pressure on what many consider is adequate funding for public education. This is not only K-12 but also the Community Colleges and the Board of Regents. There are three major competing forces for increased share of the general fund budget. These can be briefly listed:

Medicaid. This is a federally mandated program where the state general fund pays for approximately 50% of the dollars required. Contrary to popular thought that Medicaid funds primarily go toward welfare coverage, the primary use is for nursing home and seniors.

Education. Quality of life in Iowa is centered around education. An educated pool moving into the labor force is a key component for attracting new industry to both the state and our county,

Economic Development. In the larger counties this will create a larger tax base that, in turn, will help finance necessary state programs.

While these three forces enjoy substantially different percentages in funding, the emotions of each literally consist of a ìwarî for dollars between seniors, kids and the business community. With no tax rate increase as a point of beginning, it goes without saying that it is extremely difficult to fit all program needs into a revenue stream that is only slightly above last year.

Nevertheless, I am strongly committed to quality education, which means increasing allowable growth annually, maintaining the K-3 class size reading program, and maintaining the potential for increases in teacher quality initiatives i.e. career ladder professional development. Community colleges will be increased four million dollars and the Regents allowed to bond for capital projects with the state backing up the tuition dollars. A resolution has been passed in the Senate to require the legislature in the interim to review the school finance formula. The most hopeful sign is that the revenues coming into the state are going up, so that possibly in the 2006 budget year we will have additional revenues available for education. In the 2005 budget, however, I am afraid that a 2 % increase is all that we can do in order to be fiscally responsible.

There is some confusion about the 6% allowable growth. That requested amount is not for next year, July 1, 2004 to June 30, 2005. The Legislature and the Governorís request are the same, 2% next year, replace the dollars that were taken away with the Governorís across the board cut (2-1/2%), continue funding for K-3 reading / class size with 29 million new dollars. The only piece remaining for decision for the 2004-2005 year is teacher quality / training which the legislature has maintained at the same 44 million as the current year. The Governor requests a higher amount. I, myself, would like to see this amount increased, as well trained teachers produce quality students.

The 6% requested by a variety of groups is for the year July 1, 2005 to June 30, 2006. For the past few years, the legislature has set the allowable growth level one and one half years in advance. Since we never really knew what revenues we would have, our determination of allowable growth was not based on actual figures. Then, if revenues did not materialize, the Governor would be forced to cut all programs to balance the budget. This year, the legislature wants to change the timing of the allowable growth decision from one and one half years to six months before the beginning of the new fiscal year. Therefore, the allowable growth amount will be decided in February, 2005, for the school year beginning July 1, 2005. The estimate of revenues received in December, 2004, would be a more accurate point on which to base the allowable growth decision.

I hope that this letter helps to explain our 2005 situation. I look forward to working with you to make education in Iowa the very best in the United States.