Iowa House Republicans explain refusal to follow education funding law

The January 23 edition of the Iowa House Republican newsletter contains a mix of news and spin on a wide variety of topics, such as the state budget, the minimum wage, the check-off for corn growers, distracted driving, marijuana use and even a controversy over whether states should charge sales tax on “take-n-bake” pizzas.

From my perspective, the most interesting nugget was the effort to explain House Republicans’ stubborn refusal to comply with a state law that passed nearly two decades ago with strong bipartisan support. Iowa Senate Democrats are determined to set “allowable growth” levels for K-12 school budgets in the time frame laid out by the law. But Republicans are not budging from the position they staked out last year: no early notice for school district leaders who need to plan their budgets.

The Iowa legislature has been setting “allowable growth” levels for K-12 school districts for 40 years. During the mid-1990s, lawmakers in both parties agreed that school administrators would benefit from more lead time in planning their budgets. (School districts need to finalize their budgets by April 15 for fiscal years that run from July 1 to June 30, and the legislature often doesn’t finish its work until after April 15.) So, the Iowa House and Senate unanimously approved a new school funding law in 1995, which Branstad signed.

Under that law, the Iowa legislature is supposed to set an allowable growth level for K-12 school district budgets more than a year in advance.

In early 2012, the Democratic-controlled Iowa Senate approved 4 percent allowable growth for fiscal year 2014 (covering the 2013/2014 academic year). House Republicans honored Branstad’s preference to delay action on school funding until after the legislature had passed comprehensive education reform. In May 2012, lawmakers agreed on a scaled-back education reform bill, which Branstad signed. But that law left some key issues unresolved.

Around this time last year, Senate Democrats again attempted to comply with the 1995 law on school funding. At that time, Republicans offered this excuse for not setting an allowable growth level for the 2014/2015 academic year:

Gov. Terry Branstad and other statehouse Republicans have said they don’t want to set the outlying year’s growth rates so that it can instead focus on a number of education reforms that are bound to cost the state more money, like teacher compensation and potentially tinkering with the length of the school year.

Democrats are crying foul, saying failure to set the rate is not only harmful to schools but additionally goes against one of Branstad’s key goals of bringing predictability to state finances.

Lawmakers approved that education reform package at the end of last year’s legislative session, and Branstad signed it into law. So what’s the problem now?

According to the latest Iowa House Republican newsletter (pdf),

Much like our antiquated expenditure limitation law, the law requiring school funding growth 18 months in advance is outdated. The expenditure limitation law allows the Legislature and the Governor to spend more than the state collects. The education funding statue allows, possibly even encourages, the over-promising that leads to across the board cuts and property tax increases.

When families make financial commitments several years out into the future, they only do so when they have a good idea of what their resources are and will be. Making a funding promise to school districts without knowing other budget factors, including the amount of revenue, is poor budgeting.

The second paragraph ignores the fact that Americans routinely commit to major expenses like home mortgages, car loans, and student loans without knowing exactly how much money they will make years into the future.

More important, the across the board budget cuts happened during the worst national recession in 60 years, when almost every state experienced a major shortfall in revenues compared with projections. Iowa’s 1995 law has generally worked well and not led to “over-promising.” In contrast, failing to comply with the timetable has made life difficult for school district leaders.

Kathie Obradovich wrote in her latest Des Moines Register column,

House Speaker Kraig Paulsen, looking like he’d rather be having a pedicure with a flaming chainsaw than discussing the allowable growth law, said Republicans would prefer to wait until January 2015. And, by the way, they also prefer to call it “supplemental state aid.” The difference is that the state now pays for the portion of the increased school budget that used to come from property taxes.

Paulsen said Republicans want to wait until they have a clearer picture of how much money they can expect the state to have before determining its largest expense.[…]

However, that doesn’t change the law. Republicans can call it “supplemental state aid” or “big bags of money” or “Mildred,” or whatever they want, but they are still obligated to set a figure by mid-February.

By waiting for more certainty about state revenues, legislators are shifting the uncertainty to school districts. If anyone wonders why it’s important to decide school spending in advance, just recall what happened last year.

While legislators wrangled over “supplemental state aid,” and education reform, school administrators were forced to make budget and staffing decisions in the dark. […]

A reporter asked Paulsen on Thursday whether there were any other laws he would not like to follow.

That’s the right question.

The bottom line is, laws are not optional. If you don’t like one, you can work to change it, but at this point, the Iowa Senate would not eliminate the requirement to approve school funding a year in advance. Maybe it will take a lawsuit to force the governor and the Iowa House to comply with the law, although litigation is so expensive that I doubt any school districts will go there.

Please share any relevant comments in this thread.

UPDATE: Iowa Senate Democrats are supporting 6 percent allowable growth for the fiscal year that begins July 1, 2015 (that is, covering the 2015/2016 academic year).

Richard Wortmann, a science teacher in Ottumwa, was among those who expressed concern that if legislators put this decision off ’til next year, that funding decision won’t be made before schools have to certify their budgets in mid-April [2015].

“I’m a department chair in my building and have a little bit of influence in hiring new staff members,” Wortmann said. “If the budget is not decided in a timely manner or for an adequate amount, it’s really hard to try to get the best and brightest teachers or adequate replacements.”

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