SAVE funds targeted in Condition of the State

LEE COUNTY – With the Governor’s Condition of the State address a week in the mirror, public school officials in Lee County shared some thoughts on proposals offered by Gov. Kim. Reynolds which could impact education in the state.
One of the most glaring proposals was moving 30% of the Iowa SAVE fund, a state-wide sales tax collection that currently goes to public school districts according to a population-based formula. The Governor proposed to allocate the 30% toward property tax relief leaving some districts in a pickle when it comes to funding and debt service.
Fort Madison Superintendent Mike Wolter said the proposal creates uncertainty around district budgets.
“Any reduction or redirection of SAVE creates uncertainty for long-term planning. Districts rely on the predictability of SAVE to responsibly plan and phase large facility projects,” he said.
“Moving 30% of those funds to property tax relief would likely require districts to either delay projects, scale back renovations, or seek alternative funding sources.”
He said Fort Madison Community School District has already earmarked a majority of their funds for bond payments on the recent improvements to the district's two schools.
“While property tax relief is important, reduced certainty in SAVE hurts our ability to plan for facilities that serve students in the long term,” he said.
Central Lee Superintendent Dr. Andy Crozier echoed Wolter’s take on the proposal and said the state could have many proposals on property tax this year.
“I think we all agree that all Iowans would like to pay less in property taxes. It will be interesting to see the various proposals that come out of each chamber. Currently, the House version has yet to be released. On the surface, I'm not in favor of scooping 30% of SAVE dollars by 2030 for property tax relief. We feel like this is "robbing Peter to pay Paul,” he said.
He said there will probably be some negotiation on the percentage and he would favor a date further into the future to scale things out. And Central Lee, which currently doesn’t levy a voter approved PPEL, may have to reconsider that if funds are reduced by the state.
“Doing it that way would reduce the burden on school districts and allow them to better understand their revenues over several years without making drastic cuts,” Crozier said.
"A 30% reduction in SAVE dollars for Central Lee would be approximately a $350,000 cut. We currently are one of the few schools who do not levy the Physical Plant and Equipment Levy (PPEL). This cut would likely force us to reconsider usage of the PPEL.”
Central Lee is also considering an expansion at the elementary school of about $4 million which would be funding leveraging state funds. SAVE funds don’t factor in open enrollment so the amount of funding going to Central Lee is reduced compared to other schools. The district currently has about 450 students open-enrolling. However, the funds do give the district some options when looking at infrastructure spending.

“By bonding against SAVE revenues, we did not need to consider a tax increase (PPEL) or additional (general obligation) bond. In our case, it helps us meet the needs of our students without putting more of a burden on property taxpayers,” he said.
Gov. Reynolds also spoke about allowing the full state per-pupil funding to follow individual students to whatever school they choose to attend.
Wolter said despite there not being a lot of charter schools in rural Iowa, the bigger concern is the continued migration of public funds away from public schools.
“My larger concern is the continued diversion of public dollars away from public schools. Public school districts are required to serve every student and maintain the infrastructure, staffing, and supports that go along with that responsibility,” he said.
“When funding is pulled away, districts are still left with many fixed costs, which can weaken the overall system that serves the vast majority of students.”
Reynolds said she also favored allowing students in charter schools to be involved in extracurricular activities at the public schools covering that district. Both Wolter and Crozier said that structure, although probably rare in rural Iowa, should come with a cost structure for the districts hosting the activities.
Reynolds made an encompassing statement that the state should be funding the students and not be concerned so much with the systems.
Crozier said that’s a good campaign quote for legislators, but in reality, that’s been the system for many years.
“The legislature has attempted to make the per-pupil funding more equitable, but year after year, they have fallen short of ensuring every dollar follows each student. 36 out of 50 US states fund their public education systems on a per pupil basis,” he said.
Wolters said in practice, however, students are funded through systems, schools, staff, transportation, facilities, and support services, many of which have fixed costs.
“Additionally, when public money is used to fund private or charter schools without the same level of transparency, oversight, and accountability required of public schools, it creates an inequitable system,’ he said.
“If public dollars are involved, there should be consistent expectations for how those funds are used and reported.” Crozier said Iowa, unlike many other states, has caps on per pupil revenues and is not solely based on the property valuations of a specific community.
“Central Lee, for the most part, receives the same funding per student that Waukee receives. Obviously, the property valuations for Waukee are significantly higher. The major differences lie with open enrollment funding and specific property tax levys (PPEL, GO Bonds, Management Fund, etc.).