Debate on school funding formula changes begins

Senators began debating a bill April 22 that would change the state aid funding formula for public schools under the Tax Equity and Educational Opportunities Support Act (TEEOSA).

LB407, introduced by Cedar Rapids Sen. Kate Sullivan, would reduce the base limitation rate for school districts from 2.5 percent to 1.5 percent for the 2013-14 school year. The rate would revert to 2.5 percent for each subsequent school year.

Sullivan said changes to the formula would allow districts to recover from recessionary funding cuts.

“We have asked a lot of school districts by holding down their spending and growth,” she said. “We have 249 very different school districts with varying circumstances and needs. We have to help these districts come back from the brink and grow a little.”

The bill makes several other changes to the funding formula, some of which include:
• increasing the local effort rate from $1.00 to $1.03 for school years 2013-14 and 2014-15;
• eliminating the teacher education allowance, instructional time allowance, averaging adjustment and local choice adjustments;
• limiting the summer school allowance to reported summer school expenditures that are included in other allowances beginning in 2014-15;
• clarifying that expenditures included in the poverty and limited English proficiency allowances cannot be included in other allowances;
• allowing additional budget authority for early childhood education when programs move from grant funding to inclusion in TEEOSA calculations; and
• including tuition paid and transportation fees paid in general fund operating expenditures.

A pending Education Committee amendment would reinstate the $30 million teacher education allowance for the 2013-14 and 2014-15 school years. The amendment also would eliminate tuition paid and transportation fees paid from general fund operating expenditures.

A Sullivan amendment to the committee amendment, which failed on a 23-14 vote, would have increased the base limitation rate in the original bill from 1.5 percent to 2 percent for the 2013-14 school year only. It also would have reduced the local effort rate from $1.03 to $1.025 for the 2014-15 school year and $1.00 for all subsequent years.

Lincoln Sen. Bill Avery said the bill and committee amendments represented a compromise to address the issues of all school districts.

“Large school districts need more money, but so do all K-12 schools in our state,” he said. “The fact is that small districts are simply going to have higher [costs per student] because they have less students.”

Avery moved to reconsider the vote on the Sullivan amendment, which failed 22-13.

Norfolk Sen. Jim Scheer said the formula would help to address the rapidly increasing agricultural land valuations that have resulted in less state aid to rural schools.

Senators moved on to debate other bills before taking further votes. Several amendments are pending.