UEN Legislative Priorities for Iowa Education Funding

1. 2015 UEN Legislative Luncheon UEN Legislative Priorities and Advocacy ResourcesNov. 18. 2015

2. Agenda Today • A little bit about the Iowa Economy and State Budget • UEN Priorities for the 2016 Legislative Session • UEN Resources

3. State of Iowa General Fund

4. = $266 million increase compared to actual FY 2015. = $294.6 million increase compared to estimated FY 2016. FY 2016 Total Net Receipts ended 6.2% above FY 2015 actual. REC revised FY 2016 to 4.0% estimated Net Receipts and 4.2% for FY 2017. Impact:

5. CRF = $539.0M • EEF = $179.7M • Growing annually Source: Iowa Legislative Services Agency Graybook, end of session analysis https://www.legis.iowa.gov/docs/publications/FR/680615.pdf

6. Governor’s veto of HF 666 included $57 million for schools, grows the ending balance surplus to $351.7M

7. Health Care Trust Fund: note $222 million that never touches the state general fund. Comparisons of PK-12 spending as a percent of state general fund don’t acknowledge this change.

8. State’s Cash Positionaka “don’t panic” • Cash position: north of $1B • CRF full at $539 million • EEF full at $179 million • Surplus for FY 2016 $351 million • Gloomy predictions of growth are hard to dispel – it depends on the date and what was happening this time last year, and the perception of not having any funds available.

9. 6.58% growth in personal income tax is the driver • 3.05% net is way ahead of the anemic 1% they were running 4 weeks ago

10. State Budget WoesPig through the Python Commercial property tax phase in done after FY 16 ($132m) and FY 17 ($25 m) TLC phase in done after 2016-17 budget $50m for year 3 grants and $50m to continue year 2 grants.

11. Economic Comparability

12. Per Capita Personal Income www.bea.gov

13. In 2011, Iowa ranked 24th in the nation in Median Household Income, up to 23rd by 2012. LSA FACTBOOK does the ranking quoting U.S. Bureau of the Census. 2013 doesn’t look remarkably different.

15. Education Funding Comparability

16. Education in Iowa gets a Smaller Slice • The National Association of State Budget Officers (NASBO)  State Expenditure Report analyze all state expenditures excluding bonds (not just general fund.) In their analysis titled State Spending by Function, as a Percent of Total State Expenditures, Fiscal 2014 • “Iowa Elementary and Secondary Education for FY 2014 was 16.8% of total state spending.” • That is below the 19.1% average for the plain states region, in which Iowa is categorized, and further below the national average of 19.5% for all states.

17. UEN 2015 Legislative Priorities

18. UEN Steering Committee 2015-16 • Jane Lindaman, Superintendent, Waterloo, Chair lindamanj@waterlooschools.org • Stephen Murley, Superintendent, Iowa City, Chair-Elect (1) Murley.Stephen@iowacityschools.org • Arthur Tate, Superintendent, Davenport, Chair-Elect (2) tateart@davenportschools.org • Stan Rheingans, Superintendent, Dubuque, Past Chair srheingans@dbqschools.org • Cindy Elsbernd, Board Member, Des Moines • Mike Mc Taggert, Board Vice-President, Sioux City • Bill Grove, Board President, Council Bluffs • Mary Meisterling, Board Member, Cedar Rapids

19. Funding Adequacy • Funding Adequacy State Percent of Growth:  UEN supports the provision of adequate funding in order to fulfill the goal of regaining Iowa’s first in the nation education status to deliver world-class results for students. School funding requires balanced sources of revenue for sustainability. Iowa’s investment in public education ought to more closely mirror the economic growth our state has been experiencing and make up for lost ground over the previous six years of record low increases. The UEN encourages the Governor and Legislature consider a commitment to the following principles in setting the state cost per pupil: • Timing: come to agreement on the state cost per pupil in the proper time required by law. • Equity: create equity for ALL children by addressing district cost per pupil equity, property tax equity and transportation equity. • Adequacy: fund districts for actual costs, noting that the focus on restricted categorized funding inhibits schools’ flexibility to make wise decisions to meet the needs of all students.

20. Timing • In 4 of the last 6 Sessions, the legislature did not set the growth rate in the year preceding the budget year, required Iowa Code Section 257.8,(1): “The state percent of growth for each subsequent budget year shall be established by statute which shall be enacted within thirty days of the submission in the year preceding the base year of the governor’s budget under section 8.21.” • In the 2010 Session, the legislature delayed setting the cost per pupil for the first time, for the 2011-2012 school year (great recession, lower state cash reserve and economic emergency funds, federal assistance pending, etc.) In 2012, no rate was set for the 2013-2014 school year. In 2014, did not set the rate for the 2015-16 school year. In 2015, did not set the rate for the 2016-17 school year.

21. Adequacy There is a cumulative impact to low funding and several years with no time for planning: 8 of the last 14 years, the increase in the cost per pupil has fallen short of cost increases typically experienced in schools.

22. How do you talk about it? • Review the Issue Brief and the UEN Op Ed piece from the DSM • What does the money buy? (student attention, programs for students, additional opportunities, lower class sizes, technology) and will continued low funding deliver? • Who’s your audience? If it’s the business community, use terms they understand. Return on investment, cost of doing business, lack of state funding shifts costs to local taxpayers.

24. ROI “A suggestive benefit-cost analysis reveals that investments in school spending are worthwhile. Increasing spending by 10% for all school-age years increased wages by 7.25% each year (Table 4). . . .This implies a benefit-cost ratio of 2.01 and an internal rate of return of 8.9%. This internal rate of return is similar to those estimated for pre-school programs (Deming, 2009), smaller than estimates of the internal rates of return for class size reductions (Fredriksson et al, 2012), and larger than long-term returns to stocks. In sum, the estimated benefits to increased school spending (that go toward productive inputs) are large enough to justify the increased spending under most reasonable benefit-cost calculations.”

25. National Bureau of Economic Research, educational spending does impact educational and economic outcomes. The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms, written by C. Kirabo Jackson (Northwestern University), Rucker C. Johnson (Northwestern University) and Claudia Persico (University of California-Berkeley), concludes: “Money alone may not be sufficient, but our findings indicate that provision of adequate funding may be a necessary condition. Importantly, we find that how the money is spent may be important. As such, to be most effective it is likely that spending increases should be coupled with systems that help ensure spending is allocated toward the most productive uses.” http://www.nber.org/papers/w20847

26. State Penny Extension UEN supports eliminating the sunset permanently, allowing districts and taxpayers to enable long term planning and access to a full 20 years of sales tax capacity to avoid a resurgence of property tax bond issues. State penny expenditures must remain restricted as exists in current law (construction, repair, technology, equipment, buses, etc.) and as approved by voters in 99 counties, including property tax relief.

27. State Penny So Far • Progress but not done (and never will be unless time and weather stop) • With only 12 years of bonding capacity, we’ve left approximately $700 million dollars of borrowing capacity on the table, compared to a full 20-year period (Piper Jaffrey Inc. estimate in 2013). • With low interest rates and unmet needs, this is the wrong time to turn to property taxes rather than sales taxes to continue facilities repair and construction. • Fallback will always be property taxes. • Although others may want part of it, no other entity has achieved voter approval in 99 counties for their purpose. • Necessary support for technology (both bandwidth and devices necessary for assessments.)

29. Student Mental Health Services • UEN acknowledges that mental health needs are increasing, yet the delivery systems of education for students with mental health challenges as well as services to meet mental health needs both in and out of school are experiencing funding and regulatory challenges. • UEN supports access to mental health services for students and clarity of funding sources and funding responsibilities, particularly for students costly to educate, such as those in residential facilities. • UEN encourages state support for mental health services through either the education system (weighting for students with mental health challenges without special education distinction or funding which parallels the process for state juvenile home educational expenses) and/or early childhood, human services/juvenile justice appropriations when appropriate.

30. Mental Health Issues • Insufficient Resources • Undefined responsibilities • Barriers to service are numerous • Lack of service prevents academic success • Risks for staff and students • Policy Intersection: education, human services, insurance and health care, juvenile justice, special education, PMIC/facility, county and school local governments, state, federal, (Collaboration required) • Task force (membership listed in your packet) recommendations due in December.

31. Childhood Poverty / At-risk / English-Language Learner Student Weighting: UEN supports revisions to the foundation formula to support students from low-income or non-English speaking families and students at-risk of dropping out. Funding should reflect student need and districts should have authority to identify students and flexibly administer funds.

33. 9.8% Iowa vs. 29% national average additional resources per low-income students

34. 2013 ELL Task Force Recommendations • LEP weighted funding closer to the national average by increasing from .22 to .39 through a phase-in formula over a three-year period. The .39 national average weighting was shown in the Nevada study, Study of a New Method of Funding for Public Schools in Nevada, American Institutes for Research, 2012. • Extending eligibility for ELL state weighting from 5 to 7 reflecting the research-based timeline sufficient to move LEP students to proficiency: They state, “The extension of years is critical to provide enough time for all students to reach academic language proficiency through ELL educational programming to ensure they don’t fall into a subsequent designation of special education requiring an Individualized Education Program.

35. Additional Info • ELL and PK issue briefs in your packet • Much overlap with ELL and poverty. Quality PK is a good investment to address both. ELL concentration by district

36. Formula Equity UEN supports promoting both student and taxpayer equity in the school foundation formula, including equalizing the district cost per pupil and providing tax equity to property poor districts within the formula and other property-tax supported levies.

37. Student Cost per Pupil Inequality • In FY 2016, the State Cost per Pupil (SCPP) is $6,446. 164 districts (48.8%) are limited to this amount as their District Cost per Pupil (DCPP). • The other 172 districts (51.2%) have a DCPP ranging from $6,446 to $6,621, or $1 to $175 more. This extra amount is funded with property taxes. • Under current law, this $175 difference continues into the future, accessible to some district but not others.

38. SCPP low medium DCPP High Capacity Capacity/Property Tax relief Property Tax Relief

39. Toolkit for Advocacy http://www.isfis.net/Legislative

40. Aligned Assessments UEN supports assessments aligned with the Iowa Core Standards, including the recommendation of the Assessment Task Force to use Smarter Balanced Assessments for Iowa’s state test. The Task Force recommendation included formative and end-of-course assessments, measuring both attainment and growth, as part of an assessment system. The state should provide funding for additional district assessment costs pursuant to implementation of the Smarter Balanced Assessments.

41. Issues with Assessments • Authority – who decides (state BOE or legis) • Technology access (bandwidth, devices, time) • Summative and Formative Assessments (drive instructional improvement) • Alignment with Iowa Core Standards • Challenges with change (dip, paper process) • Communication challenges with parents, public • Funding ($28 per pupil SBAC for test and administration but doesn’t include tech)

42. UEN Resourceshttp://www.uen-ia.org/legislation.htm

43. Position Papers/Issue Briefs, talking points, advocacy messages • Lobby days organized by district (OK to partner) • Legislative updates • Testimony • Support to Public Education Advocacy Coalition (Funding Fact of the Week) • Web site • Advocacy Action Plan at District Level will engage when Calls to Action are Implemented • Support for local legislative conversations, press releases, public forums etc. • ISFIS Staff and Capacity support to UEN

44. Legislative Timeline • Election over. 26D:24R in Iowa Senate and 57R:43D in the House • Caucuses meet to set priorities soon – typically before the end of November. Legislative leadership in the House has changed. Also new important committee chairs. • Dec. 2, 2015 School Finance Inequities Study Committee (2 day committee authorized but only one day is scheduled) • Jan. 11, 2016 First Day of Session • Jan. 22, 2016 Last day for individual bill draft requests • April 19, 2016 100th day of Session https://www.legis.iowa.gov/docs/Schedules/SessionTimetable.pdf

45. Advocacy Actions • Invite them to a school function, board meeting, ribbon cutting, PD day, academic awards senior recognition, staff recognition for retirees, etc.) • Follow up with priority lists, issues, position papers and data soon, but doesn’t have to be the first conversation if you are just building a relationship. • Send a letter thanking them for serving on education or ways and means committee, etc. Offer to sit down and talk issues.

46. Next: Advocacy action steps • Attend Forums “Eggs & Issues” • Go to picnics and fundraisers “Most committee votes are won or lost at fish fries, not in committee meetings.” Bob Guyer • Come to the Capitol anytime (wing it or call an insider for help) • Donate money to a candidate or legislator • Have a letter writing party • Ask for legislative support • Thanks for legislative action

47. Building Public Support • Recruit others • Business leaders • Parents • Neighbors • Alumni • Work together and attend legislative conversations together • Election year impact (shortened timeline and elevated importance of connecting with voters and opinion leaders.)

48. Never doubt that a small group of thoughtful citizens can change the world. Indeed, it is the only thing that ever has. Margaret Mead Decisions are made by those who show up. President Josiah “Jed” Bartlett NBC’s “The West Wing”