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Decline In K-12 Enrollment Will Drive Legislative Debate Over School Funding

Iowa State Capitol
John Pemble

A drop in enrollment at Iowa K-12 schools will complicate the state funding debate in the next legislative session.

Enrollment in public schools fell by 5,935 students statewide, according to the Iowa Department of Education, as many families skipped kindergarten or turned to home schooling because of the coronavirus pandemic.

Each year state lawmakers decide how much schools will be compensated per student through State Supplemental Aid, or SSA. Schools that saw enrollment decline could see a gap in funding if students come back next fall but are unaccounted for in the level of state support.

“If you base next year’s SSA on this year’s enrollment numbers, we’re going to have a huge problem and we’re going to dramatically underfund our schools,” said Senate Minority Leader Zack Wahls, D-Coralville. “We need to have a legislative fix that will allow us to make that appropriate allocation of funds so that when kids do come back into school in 2021 we are not asking schools to do more work with less money for way more students that we budgeted for.”

In all, 215 out of 327 districts saw a decline in certified enrollment, which was recorded on October 1st. State education officials said in a press release that Des Moines Public Schools had the largest decrease in students, “followed by Cedar Rapids, Davenport, Iowa City, Council Bluffs, Waterloo, Sioux City, Dubuque, Burlington and West Des Moines.”

In Des Moines about half of the nearly 1,000 student decline can be attributed to parents holding their kids out of kindergarten and preschool, according Margaret Buckton, executive director of the Urban Education Network.

“Because preschool and kindergarten are not compulsory education in the state of Iowa, parents just decided we’ll keep the students home this year and start up school again in the fall when things are safe,” Buckton said.

Public school advocates are pushing lawmakers to approve an increase in funding that anticipates a rebound in enrollment.

“If (families) decide to come back into the public education system, they will not have been included in that enrollment calculation,” said Melissa Peterson, government relations specialist with the Iowa State Education Association. “Your expenses don’t necessarily change but the money you’re generating through the state formula decreases because you have fewer students.”

There is a backstop for schools to avoid budget cuts. After a year of declining enrollment, districts are guaranteed a one-year budget increase of at least one percent. If that amount is not covered by state funding, local property taxes can be used to make up the difference.

The percent increase in state aid chosen by the legislature will have a dramatic effect on the number of districts eligible to claim the budget guarantee and the amount of school funding shifted to local property taxes.

According to Buckton, an increase of 4 percent — or $93.6 million in additional state funding — would leave 76 districts eligible for a total of $7.3 million dollars in additional local property taxes through the budget guarantee.

“By the legislature investing that $90 million in a 4 percent rate, they actually provide tax relief for a lot of districts,” Buckton said. “If they set it at 2 percent, there are 163 districts — so more than twice as many — on the budget guarantee and the total property tax impact is over $35 million.”

House Speaker Pat Grassley said Republican lawmakers want to avoid triggering a widespread increase in property taxes, but are still discussing how school funding fits with other budget priorities.

“We really have to look at whatever number we’re using for SSA,” Grassley said. “I think we want to try to find a balance to not put a bunch of schools on the budget guarantee however recognizing that the request is being made to fund students that aren’t in the classroom and what does that number look like hopefully after we’ve moved beyond COVID.”

Last year, the legislature approved a 2.3 percent increase in State Supplemental Aid worth $86 million in additional base funding. State funding has not increased as much as 4 percent since 2011.

Grant Gerlock is a reporter covering Des Moines and central Iowa