Download - Legislative Services Agency
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Legislative Services Agency
Overview of School Finance in Iowa
LSA contacts:
Shawn Snyder 515-281-7799
Dwayne Ferguson 515-281-6561
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Brief History of School Finance in Iowa
In 1950 - 4,652 school DistrictsReorganization Plan adopted in 1950’s
1965 – 1,098 school districts1975 – 450 school districts1985 – 437 school districts1995 – 384 school districts2005 – 367 school districtsCurrently - 362 school districts
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Brief History of School Finance in Iowa
Until the mid 1960’s – school district funding was all property tax.
In 1971, a school foundation program adopted (enrollment based) – substantial increase in State aid to school districts.
In 1989 – enactment of Chapter 257, Code of Iowa. Implementation beginning in FY 1992.
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Brief History of School Finance in Iowa In 1992, allowable growth adopted. In 1995, modified so that the allowable
growth set 2 years in advance. In 1996, increased Regular Program
Foundation Level from 83.0% to 87.5% beginning in FY 1997 (increased the proportion of State aid and provided property tax relief).
In 1999, Special Education Foundation Level increased from 79.0% to 87.5% beginning in FY 2000.
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Brief History of School Finance in Iowa In 2001, eliminated the 100.0% budget
guarantee and replaced it with phase-out or alternate budget adjustment to begin in FY 2004. Made permanent on-time funding provision.
In 2006, created additional property tax adjustment aid to “buy down” additional levy rates for qualifying school districts that have the highest tax rates.
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Brief History of School Finance in Iowa2008 Legislative Session:
State Sales/Use Tax for school infrastructure – excess funds after school infrastructure allocations will be used for property tax relief through school aid formula.
State Categoricals – Additional categorical program funding rolled-into the school aid formula beginning in FY 2010.
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School District Finance Overview
Revenue SourcesFormula (State Aid and Property Tax)State Categorical FundingMiscellaneous Sources
Budgets/ExpendituresGeneral FundPhysical Plant and Equipment FundManagement FundOther Funds
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School District Finance Components
Combined District Cost (formula)Regular, Guarantee, Supplementary Weighting, Special Education, AEAs
Instructional Support Management Levy Physical Plant & Equipment Levy Public Education and Recreation Levy Debt Service Levy State Sales/Use Tax for School Infrastructure State/Federal Categoricals
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School District Finance Components (FY 2009)
Combined District Cost: $3,385.9 million Instructional Support: $181.3 million Management Levy: $105.6 million PPEL: $125.9 million PERL: $1.9 million Debt Service Levy: $112.2 million Sales/Use Tax (SILO): $375.0 million Categoricals: $333.7 million
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School Finance Formula Goals
Equalize educational opportunity Promote high achievement Provide property tax relief Equalize taxation Establish maximum spending control Predictable Simple Pupil Driven Provide for local discretion Provide adequate funding
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Combined District Cost
Regular Program Cost+ Budget Guarantee (Budget Adjustment)+ Weighted Enrollment Funding+ AEA Program Funding+ State Categoricals (New in FY 2010)+ Modified Allowable Growth Funding
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Combined District Cost
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Regular Program District Cost
District Cost Per Pupil
X Number of Pupils
Regular Program District Cost(Basic “pool” of money for the district)
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$5,721 – Highest (8 Districts)
$5,546 – Lowest (176 Districts)
$175 – Range• District Cost Per Pupil Increases Each
Year by a Per Pupil Amount (Per Pupil Allowable Growth)
• Minimum District Cost Per Pupil = State Cost Per Pupil
District Cost Per Pupil – FY 2009
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Allowable Growth Rate
• Recommended by the Governor
• Established by the Legislature within 30 days of
the Governor’s budget recommendation.
• Set 18 months in advance – 2009 Legislature
will set the allowable growth rate for FY 2011.
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Allowable Growth Rate x State Cost Per Pupil = Growth Per Pupil
For example:
2008-2009
4% Allowable Growth Rate X
FY 2008 State Cost Per Pupil ($5,333)
= $213 Per Pupil
Allowable Growth Amount
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FY 2009:
$5,333 + $213 = $5,546
State Cost Per Pupil (SCPP)
FY 2009 SCPP = $5,546Used to Determine Allowable Growth Per
Pupil for the Next YearUsed to Determine Minimum District Cost
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Allowable Growth - HistoryAllowable Growth Rate and State Cost Per Pupil Amounts
FY 1995 to FY 2010
$3,503
$5,768
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Fiscal Year
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000$
Allow able Grow th Rate SCPP
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Basic Funding
Pupil Driven System (Pupils x Cost Per Pupil = Regular Program Budget) Pupil Count Pupils Weighted
• Special Education• English Language Learners• Sharing• At-Risk Formula• Reorganization Incentives• Administration Functions Sharing
Budget Adjustment
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Weighted Enrollment Funding
Pupil Driven System Weightings
• Provide Funding to Cover Additional Cost• Special Education• English Language Learners• Shared Teachers/Students/Regional Academies• At-Risk Students
• Provide Incentives• Shared Teachers/Students/Regional Academies• Iowa Communications Network (ICN) Sharing• Whole Grade Sharing/Reorganization• Shared Administration Functions (new for FY 2009)
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Weighted Enrollment Funding
Special Education Weighting FY 2009
Level 1 weighting = 0.72 (28,230)Level 2 weighting = 1.21 (16,047)Level 3 weighting = 2.74 (23,957)Generates $380.0 Million
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Special Education WeightingsFY 1991 Through FY 2009
68,235
41,252
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,00019
91
1993
1995
1997
1999
2001
2003
2005
2007
2009
Fiscal Year
Spec
ial E
duca
tion
Wei
ghtin
gs
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Weighted Enrollment Funding Supplementary Weighting
English Language Learners (ELL)At-Risk StudentsSharing Teachers/Students/Community Coll.Whole Grade Sharing ICN Operational SharingReorganization Incentives
Total Weighting = 8,903.57 Funding = $49.6 million
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Budget Adjustment (Previously Called Budget Guarantee)
Regular Program Budget = Pupils x District Cost
Provides an adjustment in the Regular Program Budget for districts with no or low growth in enrollments
Phase-out began in FY 2005
Scale Down Version
101% Adjustment
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Budget Adjustment FY 2009
Total B.A. $12.1 Million (155 districts)
Scale Down (50% Based on FY 2004)
$4.8 million (64 districts)
101% Adjustment (101% Based on Previous Year)
$7.3 million (91 districts)
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Budget Guarantee FY 1996 - FY 2004Budget Ajustment FY 2005 - FY 2009
$0
$5
$10
$15
$20
$25
$30
$35
Do
llars
in M
illio
ns
0
50
100
150
200
250
300
Nu
mb
er o
f D
istr
icts
Rec
eivi
ng
Dollars in Millions Number of Districts
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Area Education Agency (AEA) Program Funding
Funding through the Combined District Cost AEA Funding - $173.4 million
• Pupil Driven• Flows Through Local District• Special Education Support Services - $123.9 million• Media Services - $23.4 million • Educational Services - $25.9 million• AEA Sharing (New in FY 2009) - $220,000• State Categoricals (New in FY 2010)
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School Budget Review Committee Funding
Five Member Committee • Authority to Grant Budget Increases• Modified Allowable Growth (Property Taxes)• Unique and Unusual Circumstances“Manage” Formula• Special Education Weights• Cash Reserve• Negative Unspent Balances• Grants Budget Authority
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School District Revenues
Where do the revenues come from?General Fund
Formula Required Discretionary
Miscellaneous Income State categoricals Federal categoricals
Non General Fund/Other
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Revenue - Foundation Formula
Where do the revenues come from?
Required Local Levy - Uniform Levy
State Aid
Additional Levy
Property Tax Equity Relief (PTER) Fund (New in
FY 2011)
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State Aid
Increase Funding for Districts
“Fair” Method to Distribute State Aid
Provide Property Tax Relief
Equalize Effort
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Foundation Formula
Foundation Level
FY 2009:87.5% of State Cost ($5,546) = $4,853 Per Pupil
State Aid
Uniform Levy$5.40 Per$1000 Valuation
Additional Levy
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Foundation Formula
Property Rich District
Property Poor District
Uniform Levy$5.40
Additional Levy
State Aid
Uniform Levy$5.40
Additional Levy
State Aid
Foundation Level
Foundation Level
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87.50% Foundation 79%
Level Foundation
Level
State Aid
AEA Special Education Support
Special Education Instruction
Additional Levy
Uniform Levy
Additional Levy
State Aid
State Aid
Additional Levy
Regular Program
Foundation Formula
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$331.1 million $105.6 million*
$350.9 million
Additional Levy
$47.3 million
Uniform Levy
$617.7 million
Special Education Regular ProgramInstruction
Additional Levy
State AidState Aid State Aid$1,757.3 million
Additional Levy$27.1 million
AEA Special
Education Support
Foundation Formula (FY 2009)
*Does not include the state aid reduction of $10.0 million
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Revenue - Foundation Formula
FY 2009
Uniform Levy = $617.7 million
State Aid = $2,224.4 million
Additional Levy (Second Effort) =
$561.0 million
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Additional Levy – Property Tax Adjustment Aid
FY 2009 - $18.0 million appropriated
to buy down rates
FY 2010 - $24.0 million appropriated
FY 2011 and beyond - $24.0 million
plus PTER funds
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Property Tax Adjustment Aid
Appropriation of FY 2009 $18.0 million for
FY 2009 “buys” 65 districts down to a rate
of $4.14/$1,000 of valuation.
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Sidebar – PTER Fund
Starting in FY 2009: Statewide 1% sales/use tax
used to fund SILO with remaining going to PTER.
Funds generated in FY 2009 for PTER will be used
for FY 2011 school aid property tax relief for
property tax adjustment aid.
Any remaining PTER funds will be used to increase
the foundation level.
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FY 2011 - Property Tax Adjustments
$-
$1.000
$2.000
$3.000
$4.000
$5.000
$6.000
$7.000
$8.000
0 50 100 150 200 250 300 350
Tax
Rat
e pe
r $10
00 V
alua
tion
FY 2011 Adj. P.T. Rate Rate After $24M Approp. Rate After PTER Adj. Foundation Level Increase Impact
Unadjusted Prop. Tax Rate
Prop. Tax Rate w/$24M Approp.
Prop. Tax Rate w/PTER Funds
Foundation Level Increase w/PTER
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Discretionary- General Fund
Instructional Support ProgramUp to 10.0% of the Regular Program BudgetBoard Approved for Five YearsVoter Approved for Ten Years
FY 2009: 339 Districts $181.3 millionState Aid - ($14.4 million [Frozen])Property Tax - ($90.7 million) Income Surtax - ($76.2 million)$46.2 million Additional State Aid to “Fully” Fund
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State Categorical Funding for FY 2009
Educational Excellence (Phase I, II) - $55.5 million Student Achievement/Teacher Quality - $248.9
millionTeacher Compensation - $210.0 millionProfessional Development - $28.5 millionOther Programs - $10.4 million
Early Intervention/Class Size Reduction - $29.3 million
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State Categorical Appropriation Amounts FY 2002 to FY 2009
$-
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
Dol
lars
in M
illio
ns
Class Size Reduction Educational Excellence Student Achievement Teacher Quality
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State Categorical Roll-in (FY 2010)
Educational Excellence and SATQ Teacher Comp = Teacher Salary Supplement ($250.9 million)
SATQ Professional Development = Professional Development Supplement ($28.5 million)
Early Intervention/Class Size Reduction Supplement ($29.3 million)
Beginning in FY 2010 following categorical items will be funded on a per pupil basis with an allowable growth rate established annually beginning in FY 2011:
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Federal Categorical - Examples
FY 2008:Title I - $63.3 millionTitle II - $20.6 millionIndividuals with Disablilities
Education ACT (IDEA) - $26.4 million
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Non General FundRevenue Sources:
Management Levy: $105.0 Mill. (357 districts)PPEL: $125.8 Mill. (336 districts) Public Education and Recreational Levy
(PERL): $2.0 Mill. (18 districts)Debt Levy: $112.1 Mill. (207 districts)State Sales/Use Tax for School Infrastructure:
$375 Mill. (All districts)
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Sales/Use Tax for School Infrastructure
Statewide Sales/Use Tax for School Infrastructure enacted in 2008.
Funding is based on a per pupil distribution and is linked to the School Infrastructure Local Option (SILO) sales tax distribution formula.
By FY 2014, all districts will receive the same per pupil amount.
Any excess will be used for Property tax relief through the school aid formula.
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Cash Reserve
Property Taxes Levied for:Cash FlowState Aid, Property Tax ShortfallProvides “cash” behind spending
authority$153.6 million320 Districts
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State Public School Funding
State General Fund Appropriations forPublic Schools:FY 2007 – $2.302 billion (42.7% of State General Fund expenditures)
Estimated FY 2008 - $2.487 billion (42.4%)Estimated FY 2009 - $2.643 billion (43.1%)
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Recent IssuesRecent Issues Subject of Legislation:
Equalization of Per Pupil Spending Enrollment Changes (Declines/Increases)
Transportation Costs Property Tax Relief/Property Tax Equalization
Technology School Infrastructure
Teacher Compensation Curriculum
School District Fees
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Questions?