When the school aid formula used by the Iowa Legislature to disburse state funds to local public schools was introduced in the early 1970s, it was intended to assist districts that could not properly fund themselves based on property tax dollars. The state created a cost per pupil to ensure that districts received that amount for each student.

It was an attempt to guarantee that all Iowa students receive an equal education.



This story is part of a collaborative investigation of IowaWatch and Iowa Public Radio. Listen here to a report by IPR’s Sarah Boden on how disparity in school funding for transporation is affecting one west-central Iowa school district and the children it teaches.

Now, nearly 50 years later, legislators, superintendents and lobbyists say the formula is outdated and creates a major disparity in the level of education Iowa students receive.

Many districts are unable to provide the same level of education, opportunity and resources as their neighbors, a collaborative investigation by IowaWatch and Iowa Public Radio revealed. That’s because some districts are granted the ability to spend more than the set district cost per pupil, while others cannot. Moreover, the formula doesn’t take into account differences in transportation costs for rural districts, the investigation showed.

“If we believe that all kids need to be treated equally then the funding needs to be distributed equally,” Centerville Superintendent Tom Rubel said. Rubel leads a district in southern Iowa that has 1,335 students. It covers 165 square miles, a lot smaller than a neighboring district – Davis County — that covers more than 450 square miles. [Editor’s note: The name of Centerville’s superintendent was incorrect in an earlier version of this story. It has been corrected.]

“If you have higher transportation costs in a district than opposed to a neighboring district, you are at a deficit at a certain degree in money that could be put into classrooms,” Rubel said.

This past legislative session a bill introduced to address both the transportation cost differences and the disparity in what districts can spend on education per student, made it through the full Senate and House Education Committee. However, the House Appropriations Committee did not take up the bill, SF 455.

State legislators IowaWatch interviewed said Iowa’s economy needs to improve before changing how school districts are funded, leaving many districts burdened by extra costs and less money.

Iowa school districts by financial and geographic details

IowaWatch graphic by Krista Johnson

Data Source: Iowa Department of Education

TALE OF TWO DISTRICTS

Davis County Community School District in Bloomfield, Iowa, with an enrollment of about 1,170 students – the official count for school formula purposes was 1,175.9 – in 2015, is one of many that could have benefited from SF 455. The bill would have allowed Davis County to spend more per student and receive assistance for its high transportation costs.

When passed in the 1970s, the school aid formula elevated all districts to the set district cost per pupil. But districts that had been spending more than that amount were allowed to continue doing so. The Davis County district was not one of those allowed to spend more.

In 2015 Iowa’s district cost per pupil was set at $6,446. But by being grandfathered in, 171 districts have continued to spend up to $175 more per student enrolled than Iowa’s other 162 districts, including Davis County.

IowaWatch chart by Krista Johnson

Davis County could have spent nearly $206,000 more on education in 2015 if it had $175 more than $6,446 per student.

To add to the challenge of already having less general fund money than other Iowa districts, Davis County is one of many Iowa school districts affected by high transportation costs.

Transportation costs during the 2015 school year in the Davis County district, with a geographic size of 468 square miles and fewer than two students transported per square mile, were $767,667, according to Iowa’s Department of Education. The district spent $653 per student to make sure students made it to and from the classroom.

The average cost spent on transportation per student for Iowa’s school districts in the 2015 school year was $402.61. A district with a similar student population as Davis County and spending that average would have approximately $294,000 more to spend on education than Davis County did.

The Centerville Community School District in Centerville, an approximately 30 minute drive from Davis County, spent $237 on transportation for each of its 1,335 students in 2015 – far less than Davis County spent. Centerville also was able to spend an additional $59 per student on education than Davis County could because it was one of the districts spending more than the school funding target when the 1970s bill was passed.

Even with having more funding per student and having lower transportation costs, Centerville’s Rubel said his district has suffered with funding issues. While the state has not decreased the amount of funding given to school districts, it also hasn’t kept up with the rise in expenditures and costs, he said.

“We wont have as many teachers in the district next year as we did this year,” Rubel said.

The Davis County school district is cutting back on maintenance and repairs to save money, Davis County Superintendent Dan Maeder said.

“When you’re in situations like we are, you have to prioritize,” Maeder said.

The district prioritizes the educational value of its elementary students over the level of education junior high and high school students receive, based on the belief that early childhood learning development is the most important and influential part of education, he said.

“Our backs are against the wall as far as providing high quality education like other districts can,” he said.

Iowa had 458 school districts in 1965 but that number decreased to 333 in 2016, causing students in rural areas to travel farther to get to school. Meanwhile, rural districts are forced to put less money in the classroom because of it, interviews and data show.

Total number of Iowa school districts

IowaWatch graphic by Krista Johnson

Data Source: Iowa Department of Education

LEGISLATING TRANSPORTATION COSTS

High transportation costs can be attributed to many factors. The size and density of a district, as well as the geographic makeup of an area, such as rivers, hills or gravel roads, all add to the cost. Rivers can increase the miles traveled while hills and gravel roads decrease gas mileage and are harder on buses, causing more money to be spent on maintenance and repairs.

Overall, 151 Iowa school districts spent more than the average transportation cost per student in the 2015 school year, an analysis by the IowaWatch-Iowa Public Radio team showed. Some districts spent as much as $900.

Although SF 455 didn’t make it through the Legislature this year, some remain hopeful that it could pass next year and help districts like Davis County.

The bill’s author, Sen. Amy Sinclair, R-Allerton, said the bill would eliminate district cost per pupil differences by bringing all districts to the same level of funding. It also would remove all district’s transportation costs from the base formula through a supplemental student weighting, she said.

“That weighting is based on actual transportation costs, student population, and miles traveled,” Sinclair said. “The ultimate goal was to have the same number of dollars going into the classroom for every student regardless of their zip code.”

In order to accomplish this, funding would have been distributed over the course of 10 years had the bill had passed.

“As we’ve gone through the past few years this issue has gained more ground in the Legislature, and the fact that SF 455 actually passed through the Senate is a good sign,” said Shawn Snyder, finance support director for the Iowa Association of School Boards.

Margaret Buckton, a partner at Iowa School Finance Information Services and a lobbyist for Rural School Advocates of Iowa, said this is the first time a bill removing transportation costs from the school aid formula had made it this far in the Legislature since she began working with Iowa schools in 1998. “Strategically having those two ideas in the same bill will help get it done,” Buckton said.

Districts spending more than what the state’s cost per pupil allows pay for that through property taxes collected in their districts. SF 455 would provide tax relief for people in those districts because it eventually would replace that extra money, Buckton said. That, she said, would benefit business owners, farmers and homeowners. And all districts, regardless of what their transportation costs are, no longer would have to pay those costs out of their general fund.

“Every school district receives some kind of benefit by the bill,” Buckton said.

The bill would cost the state $211 million over the course of 10 years, paid for by the growth in Iowa’s economy, Buckton said.

However, finding funds to support the bill proved too difficult this year, given that the state had to cut $118 million from its fiscal 2017 budget earlier this year and use $130 million in reserve funds after expected revenue fell short.

“The simple answer is available funding this year,” said Rep. Walt Rogers, R-Cedar Falls, about why the House Appropriations Committee didn’t take up the bill. “If we had that extra money laying around and didn’t need it in other areas of government, we would have considered it,” he said.

As chair of the Education Committee that passed the bill into the appropriations committee, Rogers said transportation and inequity costs are concerns of legislators on both sides of the aisle. “We’re waiting for some good economic years when we have good revenue and we can balance things out,” Rogers, also an appropriations committee member, said.

Wes Breckenridge, D-Newton, said he agreed that this was a difficult year to pass the bill because of the state’s budget cut, but that he hopes the Legislature prioritizes education next year.

“When you have an economy that is growing but you have a shortage in funds, you have to take a look at what is being spent where,” Breckenridge said, adding, “We have to set our priorities a little better as far as setting education before some of the other things we do.”

Until then, school districts will be forced to make difficult decisions, such as the decision made by Davenport Community School District Superintendent Art Tate.

SEEKING SOLUTIONS, SOME CONTROVERSIAL

Tate recently came under scrutiny for taking more than $2.7 million from the district’s reserve funds to put toward education costs, saying that is how much his district misses out on each year by not being able to spend as much per student as districts at the highest level.

As a result, the Department of Education filed an ethics complaint against him late last year. Although the state does not give superintendents authority to take from their reserve funds to increase their general fund, Tate said he stands by his decision, saying it is illogical and unfair that students in his district receive less money for their education than students in other Iowa districts.

One of the things he spent the money on was teachers at the high school level and coaches at the junior high level who work to divert students from dropping out or getting suspended, Tate said.

Maeder said he is happy the Legislature was able to get SF 455 as far as it did, but that more needs to be done sooner rather than later. He said the Legislature could reallocate resources and fix the school funding issues right away.

“I think that is an excellent effort by our legislators to try and solve an equity issue that has been around for far too many years, Maeder said. But, “I just don’t know if it’s a high enough priority for our Legislature.”

Buckton said: “Once they commit to it, this bill is going to take 10 years before we get to equity. If you think about the second graders today, they’ll be high school graduates before this bill solves this problem.”

ABOUT THIS REPORT:

IowaWatch reporter Krista Johnson and Iowa Public Radio reporter Sarah Boden have been analyzing data and interviewing people since the beginning of this year for this investigation collaboration.

This IowaWatch story was republished by The Hawk Eye (Burlington, IA), Des Moines Register, Iowa City Press-Citizen and Corridor Business Journal under IowaWatch’s mission of sharing stories with media partners.

Iowa Public Radio graphic by Sarah Boden