UEN Membership requires: Two or more comprehensive high schools and/or 10,000 or more students

1. 2014 UEN Legislative LuncheonState General Fund, Iowa Economic and Education Comparabilityand UEN 2015 Legislative Priorities

2. UEN Membership requires: • Two or more comprehensive high schools and/or 10,000 or more students • 4,000 or more students or • 3,000 students combined with 40% or more of the students identified as free/reduced price lunch eligible • UEN Member Districts: • Enroll 37.4% of Iowa's 478,921 PK-12 students. • Enroll 60.4% of Iowa's PK-12 students of color • Enroll 62.9% of Iowa's LEP students • Serve 45.1% of Iowa's K-12 students receiving free/reduced price lunches • Employ 35.2% of Iowa's PK-12 certified staff

3. Agenda Today • State of Iowa General Fund • State of Iowa Economy • Comparison of Education Funding • UEN Priorities for the 2015 Legislative Session • UEN Resources

4. State of Iowa General Fund

5. CRF = $522.3M • EEF = $174.1M Source: Iowa Legislative Services Agency Graybook, end of session analysishttps://www.legis.iowa.gov/docs/publications/EOS/26076.pdf

6. Source: Iowa Legislative Services Agency Graybook, end of session analysishttps://www.legis.iowa.gov/docs/publications/EOS/26076.pdf FY2015 Surplus: • $660.0 million

7. State’s Cash Positionaka “don’t panic” • Cash position: north of $1B • CRF full at $522.3 million • EEF full at $174.1 million • Surplus for FY 2015 $660.0 million • LSA details $350 million May 2014 revenue dip • $100 million due to deposit of cig taxes in Health Care Trust Fund • $80 million deposit into Taxpayer Trust Fund • $32 million due to expansion of Earned Income Tax Credit • Behavior changes as taxpayers made financial decisions at the end of 2012 calendar year, impacting 2013 revenues

8. Current State of State Revenues

9. LSA Monthly General Fund Revenue Receipts Through October 31, 2014, Document published location: https://www.legis.iowa.gov/docs/publications/MM/402984.pdf Oct. 2014 net General Fund revenue was $1.1 million (0.2%) below Oct. 2013. After four months of the fiscal year, year-to-date net tax receipts are up $84.9 million (4.2%) higher than FY 2014.

10. Big 3 are strong through 11/3/14 https://www.legis.iowa.gov/publications/fiscal/dailyReceipts

11. Refunds are down through 11/3/14 • Means Net Receipts are up

12. Future Revenue Estimate

13. Revenue Estimating Conference (REC) • REC Background • Three member panel sets a consensus revenue estimate for the state that is used by the Governor and General Assembly in setting budgets • Sets/revises the current year estimate and the upcoming budget year estimate • Met on October 9 to re-estimate revenues

14. REC Oct. 9 • Revised FY 2015 to 5.6% ($361.5 million) • Set FY 2016 growth of 4.8% ($328.2 million) • Overall, healthy if not spectacular revenue growth • REC will meet again Dec. 12, 2014 to set the estimate that binds the 2016 budget. (December estimate is binding unless Spring estimate is lower, then GA and Governor must use that one.)

15. Economic Comparability

16. Per Capita Personal Income Highest ranking among the states for Iowa in years and two consecutive years higher than national average. www.bea.gov

17. Iowa’s growth of 3.2% (2012-13) ranked 9th in the nation and is in the highest quintile.

18. In 2011, Iowa ranked 24th in the nation in Median Household Income, with two consecutive years above the national average. LSA FACTBOOK quoting U.S. Bureau of the Census

20. Source: www.taxfoundation.org Tax Foundation calculations based on data from the Bureau of Economic Analysis, the Census Bureau, the Council on State Taxation, the Travel Industry Association, Department of Energy, and others.

21. Iowa’s economic index shows growth in July (DMR 9.7.14) • An Iowa DOR look at the future of the state’s economy improved in July, increasing for the 10th straight month. The state’s economic index rose to 109.3 in July, up from a revised 109.2 in June. • Index looks at 8 factors, such as residential building permits, to forecast the direction of Iowa’s economy. • A year ago, the index was at 106.3 • A separate DOR index measures employment. That index rose by .08 in July, marking the 46th consecutive month of gains.

22. Condition of the Economy(March 10 Education Coalition Funding Fact of the Week) • Des Moines, Iowa, tops Forbes list of best places for business and careers. “It is the only place that ranks among the top quartile in at least nine of the 12 metrics we graded the cities on. Highlights for the Des Moines metro area include business costs that are 17% below the national average and an educated workforce where 36% of the population has a college degree and 92% possess a high school diploma.” • Forbes also cites tech sector growth (Facebook and Microsoft expansions) and low energy costs in Iowa, stating, “a big carrot in Iowa for data centers and other businesses with heavy energy usage: Energy costs are 22% below the national average, according to Moody’s Analytics; • Iowa has a AAA bond rating by all three bond rating agencies, Moody’s and Fitch, and also Standard and Poor’s, for many years running. The highest rating is AAA, or triple-A, which indicates an “extremely strong capacity to meet financial commitments.”

23. Condition of the Economy(March 10 Education Coalition Funding Fact of the Week) • Iowa: The June RMI (Rural Mainstreet Index) for Iowa expanded to 56.8 from May’s 55.8. The state’s farmland-price index for June advanced to 57.8 from May’s 44.1. Iowa’s new-hiring index for June soared to 73.9 from May’s 61.1.Ernie Goss, a Creighton University economist, compiles the report http://www.gossinstitute.com/?q=node/129 ; • The June farm-equipment sales index inched forward to 35.0 from 33.6 in May. The index has been below growth neutral for 12 straight months. “Despite improving economic activity on the regional farm, agriculture equipment and implement dealers in the region are experiencing very weak sales to farmers in the region. On the other hand, farm equipment manufacturers continue to experience positive growth due to healthy sales abroad,” said Goss.

24. Do low crop prices mean the economy will tank? • REC had info on the ag economy when they set the estimate of 5.6% for FY15 and 4.8% for FY16. • Farmers typically use income averaging, spreading out swings for them and the state. • Low price per bushel of corn lowers income for corn producers (depending on yields), however . . • Cost of feed for livestock goes down, increasing profit potential • Cost of corn for ethanol production goes down • Equipment manufacturing is experiencing layoffs but long term investments (grain driers and bins) are steady to increasing

25. Sum it Up • Is this Heaven? No, it’s Iowa. • We’ve recovered from the economic downturn better than most states. • Revenue dip appears to be one-time. • Education funding will keep the economy moving along and build a solid workforce. • So remember that policy question? Do you think Iowa can afford to commit to funding education adequately (and timely)?

26. Governor’s Goal to Reduce State Government by 15% • “Branstad has achieved these reductions by slowing growth in education spending, reducing state employment and driving a harder bargain with public employee unions, said Director of Management David Roederer. In the long run, those steps will ensure the government doesn't face an across-the board cut like the one enacted by Culver in 2009.” • “Measuring Branstad success is a numbers game”, Des Moines Register, August 31, 2014

27. Education Funding Comparability

28. Public Education Coalition Funding Fact of the Week • Joint effort of AEAs, IASB, ISEA, SAI and UEN • April 24 Issue has link to the entire set • http://us5.campaign-archive1.com/?u=e0acb6236d9a5dbd136a38ef4&id=948ddcee87&e=2570288da8 • Let’s take a look at some of the data:

29. $1,647 below the national average Source data:  Iowa Legislative Services Agency 2013 FACTBOOK https://www.legis.iowa.gov/docs/publications/FCT/2014/25037/25037.pdf

30. $1,647 below the national average Source data:  Iowa Legislative Services Agency 2013 FACTBOOK https://www.legis.iowa.gov/docs/publications/FCT/2014/25037/25037.pdf All expenditures includes state penny, $919 per pupil, the envy of the nation. Without it, gap could be another $600 or so ($2,200 estimate)

31. Poverty • Iowa’s funding for at-risk students and dropout prevention resources, combined with targeted grant funds for high-needs schools soon to be appropriated in July 2015, translates into a 9.8% additional funding commitment for low-income students. • The national average investment is an additional 29% funding per pupil beyond the base for low-income students. Most states provide an additional 20-25%.  Source data:  Free and Reduced Lunch Percentage Count data from Iowa Department of Education BEDS data collection.   National statistics from American Institutes for Research, Study of New Funding Method for Nevada Public Schools, Sept. 25, 2012.

32. English-Language Learner Funding During the 2013 interim, an ELL task force met and studied needs of students, best practice and funding considerations. In their report, they recommended “weighted funding closer to the national average by increasing from .22 to .39 through a phase-in formula over a three-year period.” Source: Iowa Department of Education, Bureau of Information and Analysis, Basic Educational Data Survey and EASIER

33. As Special Education Costs Increase,So do Deficits LSA Issue Review: “An allowable growth rate of 0.0% in FY12 impacted FY12 balances negatively.” The FY13 special education deficits in this chart shows the trend continues. Legislative Services Agency, Fiscal Division, Issue Review, Dec. 12, 2013, State School Aid Funding for Special Education

34. 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 on Table 5, page 11, titled State Spending by Function, as a Percent of Total State Expenditures, Fiscal 2012 • Iowa Elementary and Secondary Education for FY 2012 was 16.8% of total state spending. That compares with an average of 18.9% in the plain states region in which Iowa is categorized and well below the national average of 20.0% for all states.  

35. Education in Iowa gets a Smaller Slice The National Association of State Budget Officers (NASBO)  State Expenditure Report

36. Increase in Iowa Per Pupil Funding Since 2008: Is it really more than 10%? • Digging deeper into a study that showed Iowa posted more than a 10% increase in formula funding: A study titled “NO RECOVERY HERE” is from the Center on Budget and Policy Priorities, Sept. 2013. • It reports most states’ funding for schools is less than before the 2008 recession. • The report stated that at least 34 states are providing less funding per student for the 2013-14 school year than they did before the recession hit, with 13 of these states having cut per-student funding by more than 10 percent. • At the opposite end of the spectrum, per-pupil spending grew in 14 states, but only two states posted an increase of more than 10 percent. Those two states? North Dakota and Iowa.

37. How did they conclude 10%? • Iowa’s biggest increase in formula funding since 2008 occurred when the legislature rolled over $300 million for teacher salary supplement, professional development and early intervention class size funds into the formula beginning in FY 2010. These funds were previously a categorical fund, which this methodology states they did not consider.  • From the LSA’s per pupil funding analysis, footnote #6 explains: “FY 2010 is the first year of K-12 funding of the State Categorical Supplements through the school aid formula and accounts for $648 per pupil.” Adjustment for this item alone would show Iowa’s per pupil funding formula adjusted for inflation at a reduction of $96 per student since 2008, not the $552 increase cited in the report. • In simple terms, the 10% increase in state foundation aid in Iowa is visible only on accounting forms, not more funding available for schools and classrooms.

38. Center on Budget and Policy Priorities, May 20, 2014 New study looking at all spending. http://www.cbpp.org/cms/?fa=view&id=4011 Iowa’s % change in spending per student, inflation-adjusted, FY08 to FY14, is down $641 per student • Iowa experienced -11.7% change in spending per student, inflation –adjusted, since 2008 • Only 10 states lowered spending more than Iowa • Study concludes Iowa has lost $641 per student, inflation-adjusted, since 2008 • Increases in per student spending this year don’t fully compensate for the prior cuts: Iowa’s change in spending per student, inflation-adjusted, FY 13 to FY 14 is $23

39. Source: NCES data adjusting for cost of living differences

40. Source: NCES data adjusting for cost of living differences

41. It’s not the Money, it’s what you do with it. . . . • We often hear push back on the request for adequate funding with the statement, “we shouldn’t just throw more money at the problem.” • What does education spending buy? Or put it this way, • If your district had $1,657 more per pupil, what would you be doing with it to make a difference for students?

42. Legislative Timeline • Election over. 26D:23R in Iowa Senate and 57R:43D in the House • Caucuses meet to set priorities soon – typically before the end of November. Legislative leadership retained. Waiting for Committee chair announcements. • Governor’s staff is already working on the budget • Dec. 15, 2014 School Finance Formula Review Interim Committee (1 day committee means won’t be very comprehensive) • Jan. 12, 2015 First Day of Session • Feb. 13, 2015 Last day for bill draft requests • May 1, 2015 110th day of Session https://www.legis.iowa.gov/docs/Schedules/SessionTimetable.pdf

43. Advocacy Actions • Send a “thanks for running” letter • Send a congrats letter (all House, 25 senators in odd numbered senate districts, Governor) • Call and invite to coffee - and listen • Thank them for their public service (and for anything they supported – TLC grants, 5th year of ELL state funding, preserving PK – if you don’t know, call or email and we can look up something for you) • Ask what are hearing about education issues • Give contact information and invite them to connect with you as a resource • Find out how they prefer to be contacted

44. 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. • Watch for announcement of committee chairs and appointments. Send a letter thanking them for serving on education or ways and means committee, etc. Offer to sit down and talk issues.

45. 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

46. UEN 2015 Legislative Priorities

47. UEN Steering Committee 2014-15 • Stan Rheingans, Superintendent, Dubuque, Chair srheingans@dbqschools.org • Jane Lindaman, Superintendent, Waterloo, Chair-Elect (1) lindamanj@waterlooschools.org • Arthur Tate, Superintendent, Davenport, Chair-Elect (2) tateart@davenportschools.org • Dave Benson, Superintendent, Cedar Rapids, Past Chair dbenson@cr.k12.ia.us • Davenport, Rich Clewell, Board Vice President • Des Moines, Cindy Elsbernd, Board Chair • Sioux City, Mike McTaggert, Board Vice President • Council Bluffs, J.J. Harvey, Board President

48. Funding Adequacy 6% State Percent of Growth • In order to fulfill the goal of regaining Iowa’s first in the nation education status and delivering world-class schools, the UEN supports the provision of adequate funding, which we know, spent wisely, will prepare our students for success. • The UEN supports a goal to get Iowa’s investment in education to the national average, currently $1,657 per pupil above Iowa’s level of expenditure, beginning with a commitment of no lower than 6% annually for a minimum of 3 years. • Funding for the 2015-16 school year must be determined ASAP as the 2015 Session convenes. Funding for the 2016-17 school year must be set within 30 days of the governor’s budget announcement in the 2015 Session, according to Iowa law.

49. The LSA FACTBOOK shows continuation of a downward trend. Although Iowa maintained its 37th in the nation ranking for the 2012-13 school year, Iowa per pupil expenditures continued its downward trend, falling to $1,657 below the national average.

50. Childhood Poverty / At-risk Student Weighting • UEN supports revisions to the foundation formula to support students from low-income 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.