Waiting Game for SE Iowa School Districts
Southeast Iowa residents might be surprised by their upcoming property tax bills if the state legislature is not able to reach a decision on public education funding.
School districts in the state had to have their budgets for the 2015/2016 school year certified by April 15. This sets the maximum amount of property taxes the district can collect.
That process required plenty of guess-work this year because state lawmakers are split on how much extra money to provide to schools. House Republicans back a 1.25% increase in per-pupil funding while Senate Democrats want 4%.
Chris Stensland, Business Manager with the Burlington School District, said that division is why her district had to hike the property tax rate for next year.
"Because we had no idea where the legislature is going to end on funding, we levied an additional $500,000 in cash reserves to offset cuts because we did not know we were going to end up in funding," Stensland said.
In Burlington, the property tax rate increase is projected to be about $0.98/$1,000 of assessed valuation. The school districts in Keokuk ($1.49/$1,000) and Fort Madison ($0.78/$1,000) approved similar increases.
Stensland said pairing the additional $500,000 in property tax revenue with a potential savings of $500,000 from early retirements should allow the district to avoid cutting staff.
"What we don't want to do is go in to make cuts just to make cuts without knowing where the (state) funding is," said Stensland.
She said there will likely be two elementary school positions left vacant, but no layoffs are planned.
In fact, it does not appear that any local school district plans to lay off teachers before the April 30 deadline for Reduction in Force (RIF) notices.
Heidi Harness, Business Manager for the Keokuk School District, said the district is not making a decision on staffing at this point because of the funding uncertainty and because contract talks with teachers continue.
She said in the end, the $1.49 increase in the property tax rate is based on no increase in per-pupil funding, which is a worst case scenario.
"We have to plan for worst case scenario, so you plan for the 0%," said Harness. "That's what you turn in and if you get more than 0% -- and we have our fingers crossed -- then the state will adjust it when they finalize (the budget)," Harness said.
She said more than 0% would reduce the proposed property tax rate, which is also the case with Burlington.
The delay in Des Moines is also impacting districts beyond the need to increase property taxes.
The Central Lee School District anticipates a slight decrease in its property tax rate due to an enrollment increase. However, Superintendent John Henriksen said the enrollment increase might force the district to hire an extra 3rd grade teacher. But without a firm number in place on per-pupil funding, Henriksen is not comfortable doing that.
“We have to hold off on adding another section because we don’t know what the new money is going to be," said Henriksen.
A final decision on state education funding could come at any time. The final day of the session is scheduled for Friday, May 1. That's the last day lawmakers are paid for their work in Des Moines, which could encourage action rather than the inaction that's been the case in recent weeks and months.