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Apr. 21, 2014

Education Funding Fact of the Week: 

Late Decision on Cost per Pupil Impacts Dropout Prevention

When the legislature and the governor establish the cost per pupil according to the law, within 30 days of the release of the Governor’s budget in the year prior to the budget year, it gives school districts adequate time to thought fully plan. The legislature’s action also impacts resources for dropout prevention programs.
 
Iowa Code 257.8 State percent of growth — supplemental state aid.
1. State percent of growth. The state percent of growth for the budget year beginning July 1, 2012, is two percent. The state percent of growth for the budget year beginning July 1, 2013, is two percent. The state percent of growth for the budget year beginning July 1, 2014, is four percent. The state percent of growth for each subsequent budget year shall be established by statute which shall be enacted within thirty days of the submission in the year preceding the base year of the governor’s budget under section 8.21.
 
Dropout prevention programs will be used by 304 school districts in the 2014-15 school year, with an approved total amount of $103.5 million. The School Budget Review Committee (SBRC) sets the amount on March 25, 2014 based on requests submitted by districts last December.   
 
The 2013-14 dropout prevention budget should have been based on the 2013-14 cost per pupil which the legislature was supposed to set in the 2012 session (had they met the 30-day deadline). So by December of 2013, had the legislature set it on time, schools would have realized the 2% allowable growth in their dropout prevention budgets. Since the legislature did not act timely, dropout prevention budgets were based on the prior year's 2012-13 cost per pupil. This effectively cost schools just over $2.0 million that would have gone to dropout prevention in the 2013-14 school year had the 2% increase in the cost per pupil applied. The 2015-16 school year will set up a repeat of this poor process if the legislature adjourns without setting the state cost per pupil for 2015-16.
 
The process to determine modified supplemental amounts for dropout prevention is stated in law: 
  • District submits request for a modified supplemental amount, including budget costs, to the DE no later than Dec. 15 of the year preceding the budget year during which the program will be offered.
  • DE approves the request or notifies the district of needed changes by Jan. 15. 
  • District must resubmit changes by Feb. 1.
  • DE must submit budget amounts by districts to SBRC and DOM by Feb. 15
  • The SBRC acts on the requests at their March meeting and notifies DOM.
  • Department of Management (DOM) enters the amount approved by SBRC by April 15.
 If the state cost per pupil has not yet been determined, school districts, the DE, the SBRC and DOM must set the requested amount for dropout out prevention based on the prior year’s state cost per pupil.  That amount determines the funding ceiling for the program. The SBRC and the DE do not have the authority to change the amounts later. Without a timely decision by the legislature, the students who most need help do not have the programs and staff sufficient to meet their needs.   
 
With increasing numbers of students living in low-income families and higher expectations in graduation requirements, it is critical that districts receive annual increases to cover the increasing costs of dropout prevention staff and programs, and school leaders need time to plan those budgets thoughtfully. 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:
School Budget Review Committee Authority and Summary of Funding Decisions:  https://www.educateiowa.gov/pk-12/school-business-finance/financial-management/school-budget-review-committee/school-budget-0
SBRC Summary of March 25, 2014 Hearing Decisions: https://www.educateiowa.gov/sites/files/ed/documents/March_25_2014_Summary.pdf
Iowa Code Section 257: https://www.legis.iowa.gov/docs/ico/code/257.pdf  
 
Brought to you by the joint efforts of Iowa Association of School Boards, School Administrators of Iowa, Iowa Area Education Agencies, Iowa State Education Association, and the Urban Education Network of Iowa in support of adequate and timely school funding. 

Note: Last week’s Education Facts referenced the study by the Center on Budget and Policy Priorities, “No Recovery Here,” published in September 2013. The authors of the weekly Education Fact email would like to clarify that the report issued by the Center on Budget and Policy Priorities was not inaccurate or incomplete. This study was based on the best possible information available to the study’s authors. It was our intent to supplement their data to show the picture of education funding in Iowa. 

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