It just wouldn't feel like January if I didn't recognize the fact our state legislature is now in session! The second session of the 88th general assembly of the Iowa legislature kicked off last Monday, January 13th. As is normal in Iowa, we had to deal with winter weather on top of that, so everything is as it should be, right? The first week of the session is somewhat similar to the first day of school. Legislators who haven't seen one another since last spring are able to catch up with friends and visit with them about what they did on their summer vacation. And of course there is a lot of ceremony that goes with the beginning of the legislative session. On Tuesday we heard from Governor Reynolds as she delivered her Condition of the State address; Wednesday from Acting Chief Justice of the Iowa Supreme Court Justice David Wiggins, and on Thursday the Condition of the National Guard by Major General Ben Corell.
While all presentations were important for Iowans to hear, I was most interested in the governor's address since it is during this speech she outlines her priorities for the session. The most important of those being her proposal for school aid (in my opinion). The technical term is Supplemental State Aid, which you have heard me speak of many times before. Specifically, this is the rate of growth for the state cost per pupil. This year, the governor called for an increase of 2.5% in the state cost per pupil. In this scenario, the state cost per pupil would rise by $172, going from $6,875 to $7,052. Far from a done deal, the full legislature will have the final word. But hopefully they won't take too long since by law, they have 30 days to get a final bill to the governor for her signature. That would put the deadline at February 14th. Happy Valentine's Day!
At the same time, and for the next month, you will hear much argument about the adequacy of that number. The debate will be fierce and partisan. Whether or not you believe 2.5% is adequate depends a lot on perspective, where you live in the state, and very importantly; what your enrollment is (and how that compares to last year). All said though, here is one important fact about the growth rate of the state cost per pupil: In the decade between 2000-2010, the per pupil growth rate increased at an average rate of 3.6%. In the last decade, the growth rate has averaged 1.76%. Regardless of the variables, it is difficult to argue that an average over the decade that has barely kept up with inflation is adequate.
Of the 333 school district in the state, that proposed 2.5% means something different to each one. Whether or not it is adequate turns largely on the other side of the equation. That variable is enrollment. The fact is, there isn't a whole lot a school district can do about their enrollment trend, particularly if you are in a rural area of the state where a lot of jobs don't exist. On the other hand, if you are in a school district that is growing, a 2.5% increase in the cost per pupil rate coupled with those new students can make quite a difference. Unfortunately there aren't a lot of those in Iowa. But in that case, the trick is ensuring you aren't outgrowing the growth factor. If a school district has to hire a lot of additional staff in order to manage the enrollment growth, it probably means the growth in cost per pupil isn't enough, much the same as it isn't enough if the district is in declining enrollment.
I am uncertain most people, legislators included, understand the impact enrollment has on a school's budget. The fact is, I believe it is the most important thing! Let's think about how the proposed 2.5% will impact Hudson Schools. The basic equation is number of students multiplied by the cost per pupil. For Hudson, that would mean our regular program district cost for next year would increase by $212,714, from $4,863,868 to $5,076,582. Considering our enrollment growth, we can make this work. But what if, for example our enrollment hadn't grown? While the per pupil rate would have been the same, the equally important part of the equation remains static. This time, the total increase would be $188,506, from $4,863,868 to $4,982,617. While a roughly $24,000 difference may not seem like a lot when millions of dollars are at stake; it is worth noting that in a district the size of Hudson we are anticipating roughly $24,000 in costs next year to implement a new math curriculum.
Nevertheless, the static enrollment example mentioned above does not paint a rosy picture. In many schools in Iowa, districts aren't experiencing growth in enrollment. They are experiencing decreasing enrollment. And the number they are decreasing aren't by a small amount. If a district our size had an enrollment decrease of just 10 students, that same 2.5% increase just became $48,639. Then, it becomes very hard to make the budget work without considering budget adjustments.
We are very luck in Hudson right now because our enrollment is moving in the right direction. But, we have been on the other side of that coin too.
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