Every year public schools in Iowa spend billions of dollars to educate children, sparking taxpayers to often ask school board members, administrators and lawmakers: “Where does that money go?” That’s why part of the Alta Community School District and Aurelia Community School District’s mission is to help taxpayers understand how districts are spending that money, in an attempt to dispel the mysteries surrounding school funding. Knowing how the state school funding formula works is important in helping understand the pressures facing local school districts. Because the formula is based on the number of children enrolled in the district, as we gain children, we gain revenues to serve those children and, if enrollment declines, we also lose revenue.
While the area of school finance is complex, some basic principles make it understandable to the average citizen, including:
- The number of children enrolled in each district determines a district’s budget/revenues.
- The General Assembly through the finance formula “equalizes” funding statewide so the “cost per student” is roughly the same in every district and every student has access to a quality education.
- The Governor recommends the annual change in per pupil allowable growth. The General Assembly is responsible for passing legislation to establish the annual increase in the “cost per student/allowable growth”.
- Property taxes matter. They determine how much money each district receives in state aid.
- Funds are restricted. We can only use funds on what the legislature tells us we can.
- Schools are budget limited. Most other public entities are property tax rate limited. This difference is monumental.
Iowa’s school funding formula is a child-based formula, meaning that the allowable spending for a school district is based upon the number of children enrolled in that district on October 1 of each year. The number of students counted on that day is used to establish the district’s budget for the following year. This means our revenues are always a year behind the actual number of children we are serving in our classrooms. For the Alta Community School District, our October 1 enrollment is 510 for the current year, which is nearly identical to last year's actual enrollment. But, the total number of students provided instruction by the district increased by 27 students this year. For the Aurelia Community School District, our October 1 enrollment is 244.7 for the current year, which is up 2.3 students from last year But, the total number of students provided instruction by the district decreased by 15 students.
Why the different enrollment figures (actual enrollment compared to number of student provided instruction)? The actual enrollment is all of a district's resident students that attend school, plus all the open enroll out/tuition out students. The total number of students provided instruction are the actual number of students in the building (resident students, plus the all of open enroll in/tuition in students). So, as open enrollment in and out of a district changes and the number of resident students attending changes, so changes the total number of students provided education for a district.
Because the enrollment for our districts have been relatively stable over the past four years, we’ve been fortunate that our budgets have been stable as well. However, if enrollment declines in the future, along with increasing costs, we will be faced with the prospect of reduced resources to serve the needs of our district. This could result in personnel reductions and have an impact on programs.
