How Iowa lawmakers' funding delay has hurt school districts' budget planning, union talks

Iowa lawmakers’ long delay in setting state funding levels for K-12 public schools this year has left districts hanging on planning their budgets and hampered negotiations over new union contracts.

Districts have been forced to make their best guesses about how much state money they’ll receive as they set property tax levels and plan out staff hiring. Several districts, including Des Moines, West Des Moines and Johnston, still haven't finalized new union contracts.

School funding levels — normally completed early in the year — have been held up this year by negotiations over Gov. Kim Reynolds’ proposals to change the state’s Area Education Agencies and raise starting teacher salaries to $50,000 per year.

On Thursday, House Republicans passed a bill that would restructure AEA funding, raise teacher pay and give schools a 2.5% increase in state funding, known as SSA, for the upcoming year.

But Senate Republicans went home for the week without debating the bill, and it’s not clear whether there’s an agreement between the two chambers.

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“We want to give some certainty on SSA. We want to give certainty when it comes to teacher pay. We know school districts are waiting on us to do that,” House Speaker Pat Grassley, R-New Hartford, told reporters Thursday. “We felt that by combining these three, it gave us the best assurances to get that to the governor’s desk as quickly as possible.”

When were lawmakers supposed to set school funding levels?

By law, Iowa legislators are supposed to set school funding for the coming school year within 30 days of the governor submitting her budget to the Iowa Legislature. This year, that deadline passed Feb. 9 without action from lawmakers.

Democrats, including House Minority Leader Jennifer Konfrst, D-Windsor Heights, have said the process has left schools “flying blind” on their budget process.

“Republicans have been very behind on getting numbers to schools,” she said. “So that’s the budget part that should be solved first. It hasn’t been.”

Rep. Carter Nordman, R-Panora, the chair of the Education Appropriations Subcommittee, acknowledged that the superintendents he’s spoken with are concerned about the delay in setting state funding levels but understand it has been caused in part by the fight to secure a teacher pay increase.

“I’ve heard from a lot of my superintendents that this would be a lot easier if they knew some numbers going into this budgeting time,” he said. “But fortunately, there’s a delay for good reason, and that’s we’re determining how much more new money is going into the education system.”

Des Moines metro school districts say delay ‘limits our ability’ to make decisions about property taxes, staffing levels

In some cases, the lack of clarity on school funding has led school district officials to create budgets based on their best guesses.

All the metro area school districts the Des Moines Register contacted are in the process of approving property tax rates and setting final budgets.

Districts have seen their decisions fettered as state funding remains in question, said Jean Christenson, Southeast Polk Community School District’s spokesperson, affecting issues “such as hiring, establishing a property tax rate for the new year and can also inhibit new program initiatives in and outside of the classroom."

"Assumptions had to be made to meet deadlines that could create challenges if SSA passes for a higher increase than what was assumed,” Christenson said.

Tax rates have been at the forefront of school aid discussions because of recent deadlines.

"The challenge here is that once the property rate is sent to (the Iowa Department of Management) we cannot increase it, but we can reduce it," said Shashank Aurora, Des Moines schools’ chief financial officer. The deadline was March 15.

That's why Des Moines is using 4% SSA when calculating its tax rate, he said. Officials do not expect state funding to go above 3%.

For internal budget calculations, Des Moines Public Schools officials are using a 2% SSA estimate, Aurora said. The estimate is based on a 10-year average.

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The amount of state funding will determine whether DMPS will need to cut $14 million ahead of the 2024-25 school year budget, he said. If the Senate passes a 2.5% increase, the amount Des Moines will need to cut from its budget would be reduced by $1.25 million.

Inflation rates have exceeded school funding increases over the past several years, said Paul Bobek, West Des Moines Community School Districts chief financial officer, which he said has created increased pressure to balance the budget.

Delay in state funding pushes back teachers union contract negotiations

The budget delay is also affecting teachers union negotiations, officials say.

“Typically, we would have finalized our discussions way earlier, late in February or (at the) latest early March, because we send the contracts out by mid-March,” Aurora said. “And at this time, we still have not sent (out contracts).”

West Des Moines and Johnston have also reported similar delays in negotiations.

Delayed negotiations affect officials ability to issue contracts to teaching staff and hire ahead of the 2024-25 school year, said Lynn Meadows, Johnston schools' spokesperson.

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“It certainly would be good to have the information relating to teacher pay in advance of negotiations with the unions over the next few weeks,” Meadows said.

In some cases, the problems caused by the lack of a state funding figure has reached beyond negotiating teacher pay.

"Because of the unknowns in our budget process," said Sarah Enfield, Waukee Community School District's chief financial officer, "we are unable to offer salary increases and contracts to our 2,200+ employees, finalize staffing levels for our schools and programs, and finish planning for the next fiscal year, which begins on July 1."

Teachers unions representatives agree the continued lack of details could create a longer term hiring issue.

“The local district doesn't know what's going to pass over at the Capitol, and we don't want to have to do negotiations twice,” Des Moines Education Association President Josh Brown said of why some negotiations have stalled.

If contracts had gone out on time, district officials likely would already know who plans to return for the next school year and which positions will need to be filled, Brown said. Even if contracts were to go out in the next week, officials might not know who is staying until well into April.

“We're going to be in a situation that people are going to resign much later in the year,” Brown said. “It's going to be harder to fill positions. And I'm afraid about the number of vacant teaching positions that might exist in August due to this delay as well."

How will proposals to raise teacher pay affect districts?

Schools are also waiting to see the final details of the proposed pay increase for teachers and school staff.

The bill that passed the House would set minimum pay for starting teachers at $47,500 for the upcoming school year and $50,000 the following year.

Teachers with at least 12 years of experience would be paid a minimum of $60,000 in the coming school year and $62,000 the following year.

The bill also has money to help districts pay the higher salaries for experienced teachers and to raise pay for non-salaried staff such as paraeducators.

But it's not clear if that will pass the Senate in its current form.

The proposed teacher pay increase has not affected West Des Moines’ budget planning yet because there are not enough details, Bobek said. The district is expecting to see a pay increase for some staff.

This school year the minimum starting salary for West Des Moines certified staff was $48,451, Bobek said. The amount will likely increase when bargaining for the 2024-25 school year is completed.

“We need to see the details of this bill to understand how a statutory minimum salary will work itself through the entire salary schedule,” Bobek said.

At Johnston, the "majority of salaries for our 527 teachers are over the proposed minimum of $50,000,” Meadows said.

In Waukee, Enfield said the district is not able to adequately plan how much of its $250 million budget to use for new programming, staff, equipment and curriculum without more clarity from the state.

"Many of these decisions are on hold until the legislature settles on school funding levels, teacher pay changes, (Area Education Agencies) changes, and other bills with a fiscal impact," Enfield said. "As the chief financial officer of a large organization, I would ask that the legislature quickly finalize funding so we can move forward planning for the needs of our students and staff."

Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at [email protected] or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.

Samantha Hernandez covers education for the Register. Reach her at (515) 851-0982 or [email protected]. Follow her on Twitter at @svhernandez or Facebook at facebook.com/svhernandezreporter.

This article originally appeared on Des Moines Register: How Iowa's delay in passing school funding affects district budgets