Digging deeper into a study that shows Iowa posted more than a 10% increase in formula funding: A study titled “NO RECOVERY HERE” is from the Center on Budget and Policy Priorities, Sept. 2013. It reports that most states’ funding for schools is less than before the 2008 recession. The report stated that at least 34 states are providing less funding per student for the 2013-14 school year than they did before the recession hit, with 13 of these states having cut per-student funding by more than 10 percent. At the opposite end of the spectrum, per-pupil spending grew in 14 states, but only two states posted an increase of more than 10 percent. Those two states? North Dakota and Iowa. It is important to read this study carefully and determine how the bottom line quoted recently in legislative communications meshes with Iowa school finance. Here’s what we found: 

• Iowa’s biggest increase in formula funding since 2008 occurred when the legislature rolled over $300 million for teacher salary supplement, professional development and early intervention class size funds into the formula beginning in FY 2010. These funds were previously a categorical fund, which this methodology states they did not consider. 
• From the LSA’s per pupil funding analysis, footnote #6 explains: “FY 2010 is the first year of K-12 funding of the State Categorical Supplements through the school aid formula and accounts for $648 per pupil.” Adjustment for this item alone would show Iowa’s per pupil funding formula adjusted for inflation at a reduction of $96 per student since 2008, not the $552 increase sited in the report.
• Another factor since 2008 has also been a shift of funding, such as assuming the last dollar of state aid that used to be property taxes in the additional levy and expanding the property tax equity and relief fund to lower the additional levy. Those investments increase state aid in the formula, but since they reduce dollar-for-dollar property taxes, they have no resulting increase in school budgets.
• In simple terms, the 10% increase in state foundation aid in Iowa is visible only on accounting forms, not more funding available for schools and classrooms.

This study concludes regarding education reform: Recruiting better teachers. “Research suggests that teacher quality is the most important school-based determinant of student success. So recruiting, developing, and retaining high-quality teachers is essential to improving student achievement. These tasks are more difficult when school districts are cutting their budgets. Teacher salaries make up a large share of public education expenditures, so funding cuts inevitably restrict districts’ ability to expand teaching staffs and supplement wages.”
 
This analysis clarifies exactly why it’s important to consider all expenditures per pupil, not just state dollars, when drawing conclusions about school funding. Although Iowa maintained its 37th in the nation ranking in the 2012-13 school year, Iowa per pupil expenditures fell to $1,657 below the national average. This shortfall is a full 15.0% below the USA average, despite that fact that Iowa’s per capita personal income is above the national average. Legislators should set the 2015-16 cost per pupil before adjourning the 2014 Legislative Session to reverse the downward trend in Iowa’s commitment to funding students. 
 
Sources:
Legislative Services Agency, LSA Education Funding for Iowa Students, https://www.legis.iowa.gov/docs/lsaReports/k12Education/historical_per_Pupil.pdf;
Center on Budget and Policy Priorities, Sept. 2013, No Recovery Here,
http://www.cbpp.org/cms/index.cfm?fa=view&id=4011;
Iowa Legislative Services Agency 2013 FACTBOOK https://www.legis.iowa.gov/docs/publications/FCT/2014/25037/25037.pdf;
BEAR Facts, Bureau of Economic Analysis, State of Iowa, http://www.bea.gov/regional/bearfacts/action.cfm?geoType=3&fips=19000&areatype=19000