Allowable growth puts schools in budget bind
DES MOINES — Nearly a quarter of the state’s school districts budgeted for a 4 percent increase in state aid for next year, even though lawmakers have yet to sign off on exactly how much they’re willing to spend.
State aid is also called allowable growth. It’s a percentage increase of the state per-pupil cost to be calculated for the upcoming budget year and determined by the Iowa Legislature.
The level of allowable growth, however, is tied to the session’s education reform package. Republicans and Democrats have agreed to a 2-2-4 allowable growth formula that would give schools 2 percent more, plus a one-time payment equal to 2 percent for 2014 and 4 percent growth for 2015.
But Republicans said their support for allowable growth is contingent on Democrats accepting language that includes student test scores as part of teacher evaluations.
“I can tell you we did zero percent,” said Rep. Frank Wood, D-Eldridge, an administrator in the North Scott School District who also is one of five Democrats negotiating the education reform bill. “I think each district has to look at its own finances and make a determination. For us, we kept it at zero, even though we’ve decided not to replace several positions that we lost to an early retirement incentive we offered.”
That was the same in Mason City and Clear Lake, confirmed Superintendent Anita Micich, who heads both districts in a sharing agreement.
“We want to err on the side of caution,” she said, adding if the state decides on something that is more than 0 percent, the worst that can happen is “the property tax rate will go down.” That rate is determined at the time the district’s budget is certified, in April.
Ramona Jeffrey, executive director of business and financial services, agreed.
“We know we’re getting 0 percent” right now, she said. “We don’t know what the legislature will do” and can only budget on what the district knows at the time the budget is set.
If a district sets its allowable growth at 4 percent, for instance, and gets something lower than that, its property tax rate will rise, she said. That might not sit well with taxpayers.
The state automatically makes adjustments when the legislature decides what it will award.
The report from the Iowa Department of Management says of the 346 school districts that set their budgets by April 15:
• 216 districts (62.4 percent) certified with a 0 percent allowable growth rate;
• 38 districts (11 percent) certified with a 2 percent allowable growth rate;
• 12 districts (3.5 percent) certified with a 3 percent allowable growth rate;
• 80 districts (23.1 percent) certified with a 4 percent allowable growth rate.
Dan Smith, executive director of the School Administrators of Iowa, said districts have different reasons for setting their budgets, such as how much they have in cash reserves or the expected growth in their student population.
“I think it’s unique to each district, and it’s directly related to their financial health,” he said.
An agreement on education reform remained elusive Tuesday, which also was the deadline for school districts to send out pink slips to teachers and staff who don’t fit in next year’s budget plans. In Mason City, a list of recommended reductions will go to the Mason City School Board on May 6.
Rep. Quentin Stanerson, R-Center Point, an economics and government teacher in the North Linn School District who is one of five Republicans negotiating the education reform package, said he keeps in touch with his fellow teachers and superintendents on the progress of education reform with email blasts he sends at least weekly.
“I think it’s important that we do the work, but I certainly would have liked to see this move faster,” he said.