Please see below for a summary, written by AEA Executive Director Brent Siegrist, that outlines how Iowa’s education system fared during the 2015 legislative session. Remember that your advocacy efforts on behalf of the students, families and educators we serve are always needed and appreciated!
The 2015 legislative session is history, barring any unforeseen action by Gov. Branstad to call a special session. All in all, it was a less than stellar session. The highlight was probably the passage of the gas tax increase. While the gas tax was passed in a bipartisan manner, the extraordinary measures taken by House Speaker Kraig Paulsen to get the bill passed in the House colored the rest of the session. A number of members of the House Republican caucus were very upset about the tax increase and that led to difficulty in getting consensus on a number of issues in the House.
There is a feeling that K-12 education was treated poorly by this year’s legislature. While there is certainly truth to that feeling, in reality K-12 education was treated better than almost any other area of the budget. The budget increase was far less than necessary, but still more than most other budget areas. In the final budget agreement, K-12 schools (and the AEA system) will receive a State Supplemental Aid (allowable growth) increase of 1.25%. This will be just under $2 million for the AEA system. In addition, there was a one-time money appropriation of 1.37% (around $57 million) that was given according to the K-12 Education Foundation formula. This will be about an additional $2.1 million for the AEA system. The problem with one-time money is that it will NOT be built into the base for next year. So while the money is appreciated, it can’t be used for any ongoing expenses. Nonetheless, those two appropriations add up to over $100 million for K-12 education. Additionally, some $50 million was appropriated for the second year of the Teacher Leader Compensation system (TLC) reform effort. Lastly, $1 million was allocated to the AEA system for our efforts in implementing the TLC work across the State.
While the budget figures were disappointing because of the ever-growing cost of performing our services, we were treated better than anyone else in education, including private colleges (Iowa Tuition Grants), community colleges and the Regent universities.
The budget the Legislature passed totaled $7.17 billion plus an additional $125 million in one-time spending. Given the tightness of the final budget figures, you might assume that the budget situation in Iowa is fairly dire. However, when the Legislature went home, the state budget surplus totaled over $1 billion in the coffers. This includes 5% in the Economic Emergency Fund (about $355 million) and 5% in the Cash Reserve Fund (about $355 million). That 10% (or $710 million) is called for in state law, and the Legislature does adhere to that law. Additionally, the State will end the year with at least $300 million in the ending balance. Last month saw the second highest revenue growth ever, so the ending balance may grow some more when the fiscal year ends on June 30.
So with all of that money in the surplus, why were programs not seeing more reasonable increases? The Republicans will tell you that the surplus is one-time money – like in your savings account – and you can’t spend that on ongoing expenses. The Democrats will say that the State could certainly spend some of that money on education and still be OK. So who is telling the truth? In my opinion, they both are. You do have to be very careful when you spend one-time money on on-going costs because it can come back to bite you. On the flip side, when you have a $1 billion surplus, some of the ending balance is because of higher than expected revenues and some of that is likely to be reflected in the next year’s revenue estimates. I believe that the Legislature could have spent another $75 million or so and the State would not have been in any large financial difficulty. With that large surplus, you could absorb that into base budgets over a couple of years and still maintain the budget surplus.
You may recall that a couple of years ago the Legislature did this same type of thing with the one-time money in addition to SSA. That year we were told that the AEA system was included in the one-time money, but when the final budget bill came out, it was quickly passed and the AEA system was left out and didn’t receive that money…despite being told that we would. This year when we heard legislators might do the same thing, the AEA lobbying team went to work. We heard the rumor on a Monday and by Wednesday I was in Des Moines with our lobbyists meeting with the key people on both sides of the aisle to make sure we didn’t get left out again. That work took place almost a month before the final budget deal was agreed to, and in the end, the AEA system was included in the one-time money. Had we not been vigilant, we may have ended up like the private colleges and universities and had a surprise sprung on us in the last day or two of the session.
Lastly, the Governor has been talking about a possible special session because the Legislature didn’t set SSA for the following year (FY17). I think he is just posturing and that there is only a very small chance that might happen. If he really wanted to push that issue, he could have told the Legislature that he would veto anything that didn’t have the FY17 SSA rate set. So while he may have some item vetoes, I doubt very much that there will be a special session.
As for the AEA system, we are planning to work even harder in the coming months to try to get some of our ongoing $15 million cut restored in next year’s session.
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