December 20, 2016

Local legislators told the Carroll School Board to expect a zero-percent allowable growth to education funding from the Statehouse next year.

State legislators Rep. Brian Best, R-Glidden, and Sen. Mark Segebart, R-Vail, addressed the board and answered questions at the board’s regular meeting Monday in Carroll.

Both lawmakers cite low revenues and uncertain Medicaid costs as reasons it will be “tough” to give more money to schools.

On Dec. 12, the Revenue Estimating Committee announced a $96 million shortfall in expected state revenues. The projection is down from $7.31 billion to $7.21 billion.

Overall state revenue growth is predicted to increase by 4.2 percent over the previous budget year, yet the Legislature is expected to cut the $96 million from this fiscal year — which ends June 30 — or find savings in next year’s budget.

“We only have six months of this current fiscal year to appropriate that out of,” Segebart said. “It’s not like we’re starting the fiscal year in January, it started July 1. That’s six months that’s already been spent. It’s behind us now. It’s water under the bridge. So now if we need to deappropriate it, where are we going to get it from?”

Gov. Terry Branstad has announced that he’s taking education cuts off the table. In fact, while in Waverly last week, the governor said his budget plan increases education spending for the next two years.

“I don’t think it’ll be higher than (2 percent); I think it’ll be hard to get to that, and we’ll have to cut a lot of other things to get there,” Branstad said. “I intend to recommend a biannual budget, with supplemental state aid for both years at 2 percent, and ask the Legislature to do it within the first 30 days.”

According to the Legislative Services Agency, a 2 percent increase in state supplemental aid for fiscal-year 2018 would increase the overall cost by $130 million to $3.22 billion. A 2 percent increase for FY2019 in state supplemental aid to K-12 schools would cost the general fund about $3.272 billion — an increase of $52.2 million compared with the fiscal 2018 estimate.

Segebart and Best are not as optimistic as the governor.

When asked by school board member Gina Badding if they should expect zero-percent allowable growth next year, Segebart said, “I think you are at this point.” And Best replied, “I wouldn’t rule it out.”

Carroll Community School District Superintendent Rob Cordes expressed his frustration by asking why there’s no money if the state is expecting a 4 percent revenue increase.

“I think everybody in this room would take 4 percent on their money,” Cordes told the legislators. “So my question is where is the money? I think I have a pretty good explanation why there’s no money, and it’s called tax reform. On one hand the Republicans are talking about no money, but the next breath out their mouth is tax credits.”

Cordes says he believes tax reform and tax credits to try to attract new business to the state is coming at the expense of education.

“What they’re saying to us is, ‘We’ll backfill that with state aid,’” he said. “‘We’ll roll back property tax and backfill with state aid.’ All that’s doing is creating property-tax relief on the back of education.”

Segebart told the board members they need to look at the big picture and that Iowa’s biggest problems are population and a qualified workforce.

“You can’t find anybody to work for you and show up when it’s time to go to work, and schools are short of kids,” Segebart said. “We need growth in population and business climate. Right now Iowa ranks 49th in the country in business climate.”

Reports by CNBC and Forbes in 2016 rank Iowa ninth and 14th, respectively, for business climate. When challenged about the source of the rankings he cited, Segebart could not recall, other than saying he read it in an email.

Badding also asked the legislators if tax reform would be looked at to fill the $96 million shortfall.

“That won’t be the first thing, I can tell you that, Segebart said. “Because there’s a lot of resistance to raising taxes.”

Board President Jen Munson told the legislators she thinks it’s important for supplemental state aid to be approved as quickly as possible in order for the board to make sure its budget is fiscally responsible.

The Republican-controlled House and newly Republican-controlled Senate are scheduled to begin the 2017 legislative session on Monday, Jan. 9.