School Funding 101: The Basics

1. Enrollment: Much of the funding for Iowa schools is based on the quantity of students served by the district. The number of students enrolled by the third Friday in September determines a school district's budget. More students may enroll after this date, but the budget is set.

2. Sources of Revenue: The money to fund the school budget comes from a mix of state aid and local property taxes, along with a small amount (less than 4 percent) from federal funding. The ratio of property tax and state aid supporting a district's budget varies by district. Property-rich districts receive less state aid, and so on. Because of the school funding formula, when allowable growth rates are low, it often means a greater burden for local property taxpayers.

3. Equity: To ensure that every Iowa child has access to a quality education, Iowa law requires that the "cost per student" across the state be equal.

4. Allowable Growth: The Iowa Legislature controls the annual increase in dollars available per student. This is called "allowable growth." Allowable growth is the most significant and equitable way to control and provide adequate funding for Iowa schools.

5. Employees: A school district budget is "people intensive." With salaries and benefits comprising over 80 percent of the average school district budget, it is fair to say that allowable growth has a huge impact on the ability of our schools to attract the best teachers and pay all teachers and other school employees a fair and just wage for the important work they do with our students.

6. Flexibility: School districts are required by law to maintain separate funds for things such as buildings, property insurance, and food service. These "restricted funds" cannot be used for other purposes. Some funds for academic purposes are provided by the state through "categorical" programs, which require the funds to be spent for a specific purpose, such as technology or reducing class sizes. Allowable growth provides the greatest flexibility, allowing decisions about how funds are spent to be made by local communities based on their own students' needs.

7. Accountability: Iowa school boards are accountable to their communities for decisions about how school funds are spent, and educators are accountable to the citizens elected to school boards for managing those funds. The Iowa Legislature is accountable for decisions about whether there are adequate funds available. The key decision point for the Legislature: deciding on the amount of allowable growth each year.