Legislators to schools: ‘Plan for 0%’ funding increase

By Nick Joos

Express Editor

Iowa legislators told local school officials to expect tight budgets in 2026 and to plan for little or no increase in their schools’ funding allocation from the state next year.

School finances were top of mind for all in attendance at Monticello High School Dec. 3 at the district’s school board forum with area legislators. 

Rep. Cindy Golding, R-Linn County, Rep. Steve Bradley, R-Cascade, and Sen. Dan Zumbach, R-Ryan, attended to field questions from superintendents and school boards representing Monticello, Midland, Springville, Anamosa, Lisbon, Maquoketa Valley, Mount Vernon, North Cedar, Olin and Western Dubuque. 

One point of discussion centered around state supplemental aid (SSA), the annual per-pupil funding increase for public K-12 school districts. This number is determined by the legislature each year and is a key revenue generator for schools, along with property tax revenue. Last year’s SSA brought a 2% increase to public schools — about $162 per pupil more than the year prior, for a total of $7,988 per student. SSA was 2.5% in 2024 and 3% in 2023, which was the highest mark since 4% in the 2014-15 fiscal year. School officials warned that SSA is often below inflation. 

Golding told schools to expect perhaps even less than what they’ve received annually over the past decade due to uncertainty related to anticipated overhauls to Iowa’s property tax formulas.

“Personally, I think you should plan for 0% (SSA) because we don’t know what the property tax bill will be,” Golding said, adding that increased property valuations should still mean a net gain for school districts in their property tax revenues.

She told schools to “find efficiencies.”

Bradley said he doesn’t expect the final SSA number to be 0 but advised school board members in attendance Dec. 2 to “plan for 0 and whatever else comes is a bonus. You guys are on the school board, you know your budgets.” 

“We don’t print money, it comes from the taxpayers,” Zumbach added. “Our constituents tell us to not raise taxes, that’s what we are hearing. Don’t plan on much.”

Zumbach, a grain and livestock farmer in Delaware County, said legislators look at the health of Iowa’s ag market when considering SSA and said this year’s farmers are operating at a loss. 

“I would budget for a very low number (for SSA),” he said.

Dan Butler, Western Dubuque superintendent, warned legislators that minimal SSA combined with the decreasing enrollment in many rural districts is troublesome, especially because both variables are outside schools’ control. 

“There are two things that drive our budgets, and that’s enrollment and SSA,” Butler said. “And we do not have control of either of those. SSA is a big deal.”

Butler added that unless the increase in SSA is at least 3%, it will fall below any expected raises negotiated through collective bargaining for teacher salaries. 

“We are required by law to settle with bargaining groups, and it’s going to be around what the CPI (consumer price index) is, and there will be a gap,” Butler said. “If SSA is 0%, that 3% will need to come from somewhere, and we will continue to go to the well. Declining SSA and declining enrollment is a recipe for disaster.” 

Monticello Superintendent Brian Jaeger served as moderator for the Dec. 3 event and told the Express afterward that the prospect of a low SSA number this year is not a surprise. 

“Superintendents have been hearing that rumor for a few weeks now,” Jaeger said. “Low SSA is not sustainable over a long period of time and there will be more school districts struggling if things do not change.”

Jaeger said his district’s health care insurance costs rose 30% over the past year, which matches the rising trend of most other expenses he sees, such as utilities, salaries, etc. 

“I am certain that our health care costs and the costs of everything else we buy as a district will continue to rise. When we get the 0%-1% SSA from the state, I believe that ‘new money’ will be erased with cost increases and we will be starting from zero or a negative number at that time,” Jaeger said. 

Zumbach told school board members to prepare themselves to have “hard conversations” with their superintendents during budgeting this year. 

“You will need to find creative ways to get it done. What can you do together? You are going to have to have hard conversations,” Zumbach said. “…You have a high-importance job and have hard questions to answer. How will you take (the state’s per-pupil allotment)? How will you apply that to make your school work? That falls on you. I have a lot of faith in you.”

Hitting deadlines

School officials implored the legislators to finalize the SSA rate — no matter what it is — early enough so their school boards can digest it. 

Lawmakers have a self-imposed deadline of passing a school funding bill for the next fiscal year within 30 days of the governor’s budget being released. Last year, that deadline was in February and schools were required by law to submit a proposed budget in March. The Legislature missed that deadline and didn’t settle on an SSA number until April 8. Schools are required by law to submit their final budgets to the state April 30.

Zumbach said delays often come down to politics. Last year, the House submitted its SSA proposal in February but the Senate didn’t take it up on the floor until April 7.

“It puts you under crunch, and as much as you don’t want it, (in Des Moines) there are politics,” Zumbach said. “That (school funding) increase is a political football. We like to abide by the law the best we can and come in (under) those 30 days so you can build your budgets and start hiring or moving around teachers, but then it gets argued over and kicked down the road.”

Two main items of contention held up passage of the state’s budget last year — carbon pipelines and paraeducator pay, among others. The state’s budget wasn’t passed until May 8, a week after legislators’ per diem pay expired. 

Golding said finding compromise among lawmakers while also forming a budget Gov. Kim Reynolds will sign can be a challenge. She predicted the expected overhaul to Iowa’s property tax formula in 2026 to be “a battle” that could make a timely SSA number difficult to attain. 

Operational sharing, flexibility

School officials thanked legislators for enhancing the financial benefits tied to operational sharing during the 2025 session. 

Operational sharing offers a financial incentive for districts to share specific personnel, including a superintendent, human resource officials, business managers, curriculum directors, counselors, social workers and more, between districts. 

Districts that utilize operational sharing then receive additional “students” onto their certified enrollment, thus increasing their state funding. 

Midland Superintendent Doug Koerperich took operational sharing one step further. Since his district in Wyoming and Oxford Junction is quite rural, Koerperich proposed changing the law to include intra-district sharing. 

“Right now, we need to share with another public entity, but location matters. At Midland, who do we have to share with?” Koerperich asked. “…Individuals within a small district wear multiple hats. Couldn’t we recognize that as operational sharing? If I am superintendent and special education director, those are two positions that are recognized as operational sharing. Shouldn’t we receive operational sharing dollars? That’s consolidation at its finest.”

Bradley said he was interested. 

“We all represent small districts,” he said in response to Koerperich. “We are not Waterloo or Cedar Rapids. That’s who we advocate for is small districts, so that’s what we will do.”

Superintendents and school boards also implored the legislators to push for loosening their spending restrictions. The state sets spending rules on schools’ many accounts.  

School officials say these stringent rules give them less flexibility when working with the funds they have on hand.

Zumbach said he was interested in hearing more from districts about what flexibilities they need to deal with the purse strings he and fellow legislators expect to tighten.

“The people who elected us are telling us they don’t want to pay more (taxes),” Zumbach said. “It isn’t us personally saying no, it’s the people who tell us. …We want to help you make the dollars be more flexible but still protect the taxpayers.”