I want to walk everyone through what we’re attempting to do regarding school finance at Interstate 35 CSD. School finance is rather confusing – sometimes even for those of us that work with it every day! I will do my best to make this straightforward – if you have any questions please, please, please contact me (kfiene@I-35.k12.ia.us).
On January 26, 2015, the I-35 Board of Directors approved a Resolution to Consider Participation in the Instructional Support Program and to Schedule a Public Hearing. Obviously this language was prepared by our school attorney as there are specific timelines and requirements in the law when doing this. In the spirit of transparency, it is important our constituents know exactly what this very legalistic-sounding Board action means. Also, the Instructional Support Program is also referred to as the Instructional Support Levy.
The Instructional Support Program is an optional program that allows a local district to decide to supplement revenue for the school’s General Fund. As hopefully you read in an earlier blog post (if not, scroll down and you’ll find additional information on school finance), the General Fund (also known as Operating Fund) is the largest part of a school’s budget. It is the fund where we have to pay energy costs, transportation costs, salaries, benefits, curricular materials, professional development, etc.. I regularly refer to the General Fund as the “Teaching and Learning Fund” as that is its primary purpose. There are multiple other funds in school but the important thing to remember is unlike how most of us operate in our personal lives, a school cannot legally shift money from one fund to another fund. For instance, the Physical Plant and Equipment Levy (PPEL) can only be used on infrastructure, purchasing buses, and some technology; it cannot legally be used to pay salaries, benefits, diesel costs, repairs to buses, etc.
Further, what a school gets for revenue in the General Fund is dictated by the school finance formula – a reasonably complex formula that when broken down to its simplest form looks like this: # of students x $ per pupil spending allotment (set by the Iowa Legislature) = Total General Fund money. Again this is an oversimplification but the general formula described is accurate. What’s the point you may ask – the point is local schools have almost no local control on funding for the General Fund as everything is dictated by the number of students a district has and the amount of money per pupil that is approved by the Iowa Legislature.
One of the only ways a local district (local control – not state control) can supplement revenue to the General Fund is through the Instructional Support Program (ISP). There are two ways for a local district to approve the ISP: 1) Board-approved for a maximum of five years, or 2) voter-approved for a maximum of 10 years. Further, the maximum ISP by law is equal to 10% of the total Operating Fund; it can be funded through local property tax or through a combination of property tax and income surtax. For additional information on the Instructional Support Program, go to the I-35 website front page and there is a PDF document that goes into more detail (http://www.edline.net/pages/Interstate35CSD).
It is also interesting to note that 329 out of 338 districts in Iowa have some form of the ISL (97%) in FY 2015 – Interstate 35 is one of the nine schools without the ISP. Again in simple, straightforward language – districts with an ISP have more money to spend on teaching and learning per student than we do at Interstate 35.
Normally I would be an advocate for the voter-approved Instructional Support Program – but in our current situation I believe the Board-approved ISP is a better option. First, the Iowa Legislature has not set funding for next year … and the numbers being tossed around will be inadequate to maintain and grow programs. Second, if we were to pursue the voter-approved ISP, if approved the ISP would not be included in the 2015-2016 budget due to required timelines for special school elections. Consequently to meet the immediate needs (2015-2016) I recommended pursuing the Board-approved ISP.
Here is perhaps the most critical information for patrons to know and understand … we are pursuing the Instructional Support Program but will not be raising our overall school tax levy rate. Here is a bit more data to illustrate exactly what we are planning.
- Percentage of total school levies used for Operating Fund
- Interstate 35 CSD – 66%
- State average – 79%
- Percentage of total school levies used for Non-Operating Funds
- Interstate 35 CSD – 34%
- State average – 21%
What this tells us is we’re generating less on teaching and learning (Operating Fund) than the state average and more than the state average for non-teaching and learning (non-operating funds) – schools are about teaching and learning so we need to adjust our levies accordingly. To fund the Instructional Support Program we plan to lower the levy rate in the Management Fund – and perhaps slightly lower other non-operating fund levies – and move that levy to the ISP – which will directly fund teaching and learning. We anticipate ISP money would help maintain reasonable class sizes, increase available technology, and update curricular materials.
Perhaps an analogy would be helpful. Let’s consider all school levies constitute a pie. We are NOT changing the overall size of the pie – we are just changing the size of the slices. As previously stated, the total tax levy will not increase but we will be able to generate additional money for teaching and learning through the Instructional Support Program.
What happens next? All of these steps follow the law:
- Public Hearing at 6:30 pm on Monday, February 16, 2015, in the high school library
- After the Public Hearing the Board will decide whether to approve a Resolution to Participate in the Instructional Support Program (more attorney language) … and if so the funding stream (property tax or combination of property tax and income surtax).
District patrons are encouraged to attend the Public Hearing.
In my estimation and professional opinion, approval of the Instructional Support Program is absolutely critical for the Interstate 35 Community School District. Please let me know if you have any questions, thanks!