Iowa Debating Funding Solutions

Last Updated: February 24, 2011

This article appeared in the February 2011 Rural Policy Matters.

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Political divisions in the Hawkeye State are bringing school funding issues to the forefront relatively early in the legislative session.

One of the major Republican funding proposals would increase state funding of schools to 100% over seven years and phase out local property tax levies for schools. A House panel began work Wednesday on the so-called “property-tax relief” plan. The bill would shift between $400 million and $550 million in costs from local property taxpayers to the state general fund via the school foundation formula.

Governor Terry Branstad supports the property tax “relief” plan but has said that another Republican plan to cut personal income taxes by 20% is not feasible.

There is also political division over rising school district costs and on how to address a 14-year-long decline in statewide school enrollment. The Republican-led Iowa State House has approved a zero-percent increase in general state aid to school districts for next year. The House, however, also set aside $47 million for districts with declining enrollment so that these districts would not sustain a state funding cut under the zero-percent budget.

The Democratic-majority state Senate has passed a bill that would allow a 2% increase in state and local funding for schools at a cost of $65 million. Democrats have noted that there has never been a year since the school foundation formula’s inception in the 1970s that lawmakers and the governor agreed to provide no increase in base state aid to schools.

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Coverage of the property tax proposal:

Legislative proposals for funding:

Rural districts and shrinking enrollments:

Read more from the February 2011 Rural Policy Matters.