House bill first victory for local rural school advocacy organization
'Simple' change will ease pressure on general fund
March 20, 2014
Things get done when small schools speak with a unified voice.
So was the message Wednesday when the Iowa House passed a bill that would enable districts to pay all early retirement out of the management fund, a change that will save the Coon Rapids-Bayard district $14,000 in its first year, said board president and co-founder of Rural School Advocates of Iowa Joel Davis.
Current law allows early-retirement benefits to be paid out of the management fund only if the retirees are between 55 and 65 years old. If this bill passes the Senate as expected, that upper age limit will be removed.
Many rural districts - facing declining enrollment and ensuing funding cuts - often use early-retirement incentives as a way to cut costs, explained Davis.
Teachers who have more experience have higher salaries. If they retire early, the positions can be filled with younger educators drawing smaller salaries, or eliminated entirely, saving general-fund dollars, he said.
The general fund is the only fund that can pay staff and administrative salaries, maintenance and utilities.
Currently, early-retirement benefits are one of only three things that can paid through the management fund - unless the retirees are over 65, in which case those benefits must be drawn from the general fund, cutting into the savings the district hoped to save, said Davis.
But districts cannot place an age limit on early-retirement benefits without facing age-discrimination charges. The bill in question would prevent school districts from being penalized if teachers retire outside that 10-year window, said Davis.
The bill, which was originally passed last year in the Senate but died in a House committee, was resurrected this session when Davis and his advocacy organization co-founder Bob Olsen, superintendent of Clarion Goldfield and Dows, lobbied a series of legislators at the state Capitol.
According to Davis, it passed the Senate this session in a 48-2 vote before being sent to the House, which added an amendment to make the bill retroactive to the current school year. The bill and amendment passed the House Wednesday in a 100-0 vote. It will return to the Senate for final approval of the amendment before it is sent to Gov. Terry Branstad for his signature.
Rep. Dan Muhlbauer, D-Manilla, said the bill is very good for small communities.
"It's not big dollars, but it can still save money from leaving the general fund," he said, predicting the bill will clear the Senate and be on the governor's desk within a week.
The bill's passage marks the first victory for Davis and Olsen's rural school advocacy organization, officially founded in January. Its purpose is to educate legislators on the benefits of rural education, as well as issues rural districts face - sometimes due to small legal loopholes that have unintended effects, as demonstrated here.
Though the organization took the lead on this issue, Davis was quick to share the credit.
"It's a big win for everybody," he said. "It's not exclusively our win - it took everybody."
According to Davis, 23 districts have joined the Rural School Advocates of Iowa so far, including Audubon, Ar-We-Va and East Sac County. An additional 20 school boards will decide in the next 30 days.
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