When Davenport Community Schools Superintendent Art Tate announced in March that he planned to violate state law by spending more money per pupil than the state allowed, it highlighted the strangeness of Iowa's rarely questioned status quo: There's no mechanism for school districts to consistently exceed the base-funding level.
It's not quite as simple as saying that Davenport's school district can't spend more than $6,366 per student this year. But in the name of funding equality across Iowa, the state is unusually restrictive - meaning that even if citizens in a community would support higher taxes for educational operations, there's no way to make that happen.
At heart, Iowa's system takes the admirable goal of adequate education funding and turns it into a straitjacket.
To illustrate how misguided this funding system is, consider how the NFL tries to ensure a competitive league: It has a salary floor and a salary cap, meaning that pro-football teams (like Iowa school districts with their students) are reasonably close to each other in terms of how much they're paying for players.
To state the obvious, substantially similar funding does not lead to substantially similar outcomes. NFL teams aren't bunched together between 7-9 and 9-7; six teams last season had four or fewer wins. The same performance gap exists with schools despite nearly uniform funding levels.
But more importantly, schools should not be treated like NFL teams; the stakes are much higher when it comes to education. The State of Iowa should have no interest in education-funding parity; its interest should lie in ensuring baseline educational funding that leads to baseline performance. School districts should be able to exceed that floor spending level.
Instead, state government financially ties the hands of school districts.
So Tate has said he'll break the law. The district plans to exhaust $8 million in what's known as "unspent balance" - which it is allowed to do beyond the base funding. But after that, in the 2015-16 school year, the district plans to begin spending down the additional $21 million it has in cash reserves - which is illegal under Iowa law.
Tate has outlined some planned budget cuts (totaling $1.4 million) and new programs (up to $1 million), but mostly this illegal spending is intended to stave off budget cuts that might entail closing schools or increasing class sizes by laying off teachers.
Undoubtedly, Tate is trying to make a point to Iowa legislators. Defying the law is not a long-term solution - the cash reserves will run out - but it shows the problems inherent in maintaining funding equity by holding everybody back.
I'm not suggesting that Iowa school districts should have the ability to tax and spend freely. Voters should play a role in approving or rejecting property-tax increases for educational operations. But they must have the opportunity to do so.
We can have important discussions about whether school districts are spending wisely and frugally, about teacher contracts, about educational results. But here's the perverse reality: The present funding system reduces school-district accountability with local voters because it's so rigid. You can vote for the school board, but there's never a referendum on school-district performance through a property-tax ballot measure. (Gaining voter approval for property-tax increases is never easy. Districts must show the public that they're good stewards of the money they're getting, and that any additional revenues would be spent on things that are genuinely needed - and then those must overcome voters' natural aversion to higher taxes.)
Admittedly, there are slight variations in education funding. School districts in the 1970s that were spending more were allowed to continue to do so, at a locked-in amount no more than $175 per pupil - which is presently 2.7 percent more than the statewide base level of $6,366. So every school district in Iowa is now spending between $6,366 and $6,541 per pupil. (Pleasant Valley, for example, is authorized to spend $6,499 per pupil, while Bettendorf's authorization is $6,440.) Nearly half of school districts in Iowa are capped at $6,366.
That $175 might not sound like a lot of money, but it adds up. As Tate notes, if Davenport's 16,000 students each resulted in $175 in additional spending authority, over five years that would amount to $14 million.
There are other differences. For one thing, Iowa allows districts to institute an Instructional Support Levy of up to 10 percent of regular program cost.
But nearly 90 percent of Iowa school districts - including Davenport's - are already at that 10-percent maximum, and only 11 districts have no Instructional Support Levy at all. So while that money is not factored into basic per-pupil expenditures, it's nearly uniform across the board. (And it should be noted that a five-year Instructional Support Levy requires only school-board approval, not the assent of voters via referendum. Again Iowa's system shuts taxpayers out of the decision-making process for funding.)
And there's short-term flexibility in the form of a district's spending authority that was unused and accrues year to year. So Davenport's $8 million in unspent authority represents potential spending beyond the annual per-pupil allowance that other districts might not have.
Yet in the long run, school districts in Iowa have been put into a one-size-fits-all funding mechanism. No allowances for the differences among districts - rural and urban, rich and poor, high-achieving and low-achieving. Most crucially, there's no consideration that some districts' voters would be willing to pay higher property taxes for educational spending above that base level - or that voters across the state deserve that opportunity.
I understand the appeal of this system. It means there's very little gap between rich and poor communities on a per-pupil level. It acts as a control on property taxes - although there's wide variation in rates from district to district. And it forces school districts to spend carefully because there's no opportunity to get more money.
But such strict funding equity makes little sense outside of the grossly coarse "fairness" it imposes. It usurps local control of education funding, which in a fashion also usurps local control of actual education.
The problems with the system have been exacerbated by the legislature's declining "allowable growth." The General Assembly sets an annual allowable-growth rate for school-district funding - the percentage by which per-pupil spending authority will increase. From Fiscal Year 1973 to 1984, it ranged from 4.93 to 13.59 percent, averaging 8.07 percent a year. From 1985 to 1993, it ranged from 2.54 percent to 7.18 percent, averaging 4.20 percent. And from 1994 forward, it has never been above 4 percent, averaging 2.94 percent.
So for 21 years, the average allowable growth was 6.42 percent. For the past 22 years, it's been well under half that.
That wouldn't be as much of a problem if the per-pupil spending level were merely a mandated base level instead of a cap. Local voters could supplement the base by approving higher property taxes. But, of course, they can't.
Nearly every state struggles to find the right balance among funding equity, state support, and property taxes for education, with the goal of giving all children the resources and opportunities to succeed. But Iowa is an outlier in valuing funding equity above all else, putting a ceiling on school spending regardless of what individual communities would support.
Every year, the Iowa legislature focuses on the percentage of allowable growth. Instead, it should take a hard look at the school-finance system overall, and especially the way the present system so harshly mandates a level playing field.
The fact is that each community is different, and each school district is different. Districts should have the ability to make a case to voters for higher property taxes for education, and voters should decide whether the schools deserve additional money.
Allowing districts to tap into some of their cash reserves is a start (which would prevent Tate from being charged with a misdemeanor for defying present law). But the basic framework exists for more substantial reform.
First, establish the present funding levels as a floor rather than both a floor and a ceiling, and continue the allowable-growth system.
Second, raise the $175-per-student figure to adjust for past educational-cost inflation, and then tie it to inflation moving forward. Give all Iowa districts the legal authority to spend up to that additional amount using a portion of whatever cash reserves they have.
And, finally and most crucially, give all districts the ability to levy additional taxes via referendum. Enable voters to decide locally what they're willing to spend for their schools.
