Letter to the Editor

Iowa education lags behind state revenue growth

Thursday, April 7, 2016

Despite repeated claims from politicians of both parties that Iowa's schools are their top priority, a new study shows that politicians aren't backing up that claim with real money.

The new study -- conducted by the Iowa Policy Project -- shows that basic state spending on elementary and secondary education has grown less than half as fast as the growth in state tax collections. The study examined state budget data over a seven-year period to reach that conclusion.

The study found that over that period, state tax collection increased at an average rate of 4 percent while the key school funding measure increased by 1.9 percent over the same period. The study measured supplemental state aid to schools, the most basic measure of school funding, which is a very complicated funding formula.

For the current year, the study found that same comparison holding true. For the current year, the official revenue estimate shows a growth of 3.3 percent, while schools are operating on budgets reflecting a 1.25 percent per-pupil increase in funding.

"Understand, the revenue growth number is held artificially low by the growing and incessant demand for business tax breaks that undermine revenues," said Mike Owen, executive director of the Iowa Policy Project, a generally liberal think tank. "So the net revenue number would be much higher if legislators wanted it. Instead, they continue to give away hundreds of millions of dollars before they even reach the state treasury."

The study predicted little change because of legislative trends. For budgets to be approved a year from now, the state is expecting a 4.1 percent growth in state revenues, and lawmakers were supposed to have set that figure a month ago but have not done so and they've shown few signs of wanting to take that step.

Owen said there's plenty of evidence that lawmakers acted deliberately.

"If the Legislature were to curtail business tax credits even slightly, plenty of money would be available to properly fund education and other actual public priorities that are the traditional and best-focused business of state government," Owen said. "Alas, that is not the political world in which we live."

The study used actual revenue figures for five consecutive budget years and relies on projections for the next two years that have been approved by the state's Revenue Estimating Conference. Those numbers are what lawmakers and the governor must use in crafting a new state budget. That group includes representatives from the Legislature, the governor's office and an independent budget expert.

Before that system was established, the Legislature would issue its own budget projections and it became a standard policy for lawmakers seeking to end a session and craft a budget to simply devise whatever revenue projections they needed to make the budget balance and end the session.

* Glover is a former Associated Press statehouse reporter.