1. Jan. 15, 2016 ISFIS SitRep Webinar Larry Sigel, Partner Margaret Buckton, Partner © Iowa School Finance Information Services, 2016 1

2. Webinar Reminders Use the chat pane – to express your thinking as we pose questions (chat is confidential unless you select chat to all) To ask additional questions or provide examples of how things might work in your school To suggest future webinar content To let us know you are still there To let us know of technical difficulties We will get back to you soon if we don’t answer your question during the webinar 2

3. State of State Revenue Analysis of the Governor's Budget Recommendations School funding debate begins Update on Rules Committee Session Delay on Assessment Map of the Week Preparation for Budget Planning ISFIS Budget Workshops Save the date: ISFIS Summer Conference Dates, deadlines, recipe of the week Agenda 3

4. State of State Revenues REC Revised Estimate https://www.legis.iowa.gov/docs/publications/BL/711235.pdf https://www.legis.iowa.gov/docs/publications/BL/711235.pdf 4

5. Revenues through 1/13 Personal Income Tax 8.10%+ $163 M Sales/Use Tax2.43%+ 35 M Corporate Income Tax -13.62%- 37 M Refunds8.1%- 37 M Net Receipts3.96%+ 140 M 5 Information related to State General Fund receipts is available on the Fiscal Services Division website at: https://www.legis.iowa.gov/publications/fiscal/dailyReceipts https://www.legis.iowa.gov/publications/fiscal/dailyReceipts

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7. State General Fund Revenues FY 2015 ended at 6.2% - above projections FY 2016 through 1/13/2016 at 3.96% (REC is 3.3% net revenue growth) Veto returned $55 million to ending balance: at a minimum, this is a cushion against any unexpected decline (cushier cushion since EEF and CRF are full) Policy question: Why shouldn’t legislators add $55 million to Governor’s SSA recommendation? 7

8. FY 2017 State Budget Expenditure Issue, not Revenue Issue: By 2017-18 budget, “new revenues” concept returns to normal, since not (yet) obligated into the future. 8 Commercial property tax phase in done after FY 17 ($25 m) TLC phase in done after 2016-17 budget $50m to formula to continue year 2 grants.

9. Governor’s Budget Recommendations FY 2017 9

10. State of the State In Gov. Branstad’s State of the State address good news about the condition of Iowa’s economy: “Today, Iowa’s unemployment rate has been cut nearly in half to 3.4%. Which is down from 6.1% five years ago. Iowa has the lowest unemployment rate since 2001. More Iowans are now employed than ever in our state’s history. Iowa family incomes have grown 18.3% from 2010. We have seen over $12 billion in private capital investment. We worked in a bi-partisan fashion last session to improve both Iowa’s physical and digital infrastructure. And then he said... And state K-12 education funding is up 35% since 2010.” 10

11. State school foundation aid:  FY10 = $2,146.5 million (AKA $2.147 Billion)  FY16 = $2,950.3 million (AKA $2.950 Billion). Increase of $806.4 million, 37.4%, by our calculations. During that same time, the state cost per pupil was initially $5,768 (FY10) and is now $6,446 (FY16).  This is an increase of $678 per pupil, or 11.7%  SCPP increase is well below the 18.3% family income growth and even further below the increase in state funding for schools.  How is that possible? 11 Image courtesy of Master isolated images at FreeDigitalPhotos.net

12. How is that possible? State dollars replaced federal funds that buoyed up education and avoided state reductions in FY 2011. Schools received the federal dollars during the great recession which protected schools and freed up state funds to use elsewhere in the budget. Property taxes that otherwise would have funded education have been reduced. Examples – PTER fund – two more years of ELL funding now at five years of service, – state assuming what would otherwise be the property tax increase associated with an increase in the per pupil cost in both 2015 and 2016. Additionally the $5.40 uniform levy generates less due to tax increment financing diversion, now estimated in the neighborhood of $55 million (increase of $10 million since FY 2010.) Although the state is paying more, schools aren’t receiving more net dollars to devote to educating students. 12

13. 13 Observations regarding “School Funding: Up or Down since FY 2003?” (Legislative Newsletters shared with School Boards) State aid grew > SCPP (property tax relief, PK, categoricals rolled into the formula) State GF grew less: created several “off budget funds” which inflates comparisons of how much GF spent on schools Even two years less of income growth shows SCPP not keeping pace

14. Source of Information re Gov’s Budget Governor’s Budget Recommendation for FY 2016 Impacting Education (PRELIMINARY SUMMARY GOVERNOR’S FY 2017 BUDGET RECOMMENDATIONS, Legislative Services Agency: https://www.legis.iowa.gov/docs/publications/L AGRP/755567.pdf https://www.legis.iowa.gov/docs/publications/L AGRP/755567.pdf 14

15. State Cost Per Pupil 2.45% LSA's tracking tables indicate that the 2.45% increase, at an increased appropriation of $146.8 million. The 2.45% is applied to the state cost per pupil, which is an increase of $158 per pupil. The impact fiscal impact of transitioning the second year participating TLC districts from grant funding to formula funding is approximately $50 million. Although its included in the $146.8 million increased appropriation, the 2.45% increase applies to the per pupil cost. The line item appropriation for state foundation aid is actually a 5% increase, because of the combination of 2.45% and the $50 million. 15

16. Other Line Items TLC: the third installment of Teacher Leadership and Compensation grants for the districts first participating in FY 2017 is included as a line item in the Department of Education budget at $57.4 million. ILO: the Governor recommends eliminating an appropriation to the Iowa Learning Online Initiative of $1.5 million (unknown if ILO will begin charging a fee) An appropriation of $740,214 for nonpublic textbook services, which in an increase of $90,000 or 14% compared to FY 2016. An increase of $3.1 million for Community Colleges General Aid, which is approximately 1.5% (the community colleges did not receive an increase in general aid in FY 2016.) 16

17. Other Line Items An appropriation of $576,000 for Teach Iowa Scholars, which is an increase of $176,000 and level funding for Teacher Shortage Loan Forgiveness at $392,452. Property Tax Relief Phase-in: An increase of $25.0 million for the third installment of the business property tax credit and an increase of $2.1 million for the commercial industrial property tax replacement, for a total of $279.6 million in business property tax relief. Fund Balances: The Governor’s recommendation has an estimated combined reserve fund balance of $737.6 million for FY 2017 (made up of the economic emergency fund and the cash reserve fund combined balances.) Governor’s recomendation spends the state surplus down by $70 million, but is still underspending by $112 million (basically means the governor’s budget results in a surplus of $100 million) compared to the 99% expenditure limitation. 17

18. FY 2018 Education Funding The Governor does not make a recommendation for FY 2018 increase in the state cost per pupil. Now that the last installments on TLC and commercial industrial property taxes are complete with this FY 2017 budget, the FY 2018 concept of revenue growth ought to normalize. The practice of deciding SSA timely should also return. 18

19. School Funding Debate Begins (or Continues) 19

20. House Subcommittee Action FY 2017 Thursday: Rep. Jorgensen, Rep. Dolecheck and Rep. Ruff held a subcommittee on SF 174 and SF 175, initiated in the Senate last session, still assigned to House Education Committee. The bills from the Senate set the increase in the state per pupil cost and categorical funds at 4%. The Subcommittee discussed their intent to amend the bills to a 2% increase (R members, D’s resisted) What’s next? 20

21. SSA for FY 2017 SF 174 and SF 175 will move to House Education Full Committee, then to House Floor Senate hasn’t said yet what their funding level will be (whether they stick to the 4% or do something else) After it bounces back to House and Senate and positions of difference are stacked, they will appoint a conference committee to resolve differences. No action on FY 2018 yet. 21

22. Tool to Help Explain School Funding 22

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24. Rules Committee Session Delay on Smarter Balanced Rules 24

25. Rules Committee Action Admin Rules Committee met on Jan 8 for their second hearing on the state BOE’s rules on state assessment. More in concern for the process than any expressed objection to Smarter Balanced, the committee voted for a session delay. – Postpones the rules implementation until the end of the Session, giving the legislature a chance to pass a bill requiring something different. – Lack of consensus on action in the House and Senate got us to this point to begin with Stay tuned for information to help advocate with legislators about the need to move forward 25

26. New ISFIS Programs to save you Time and Money 26

27. k-Purchase ISFIS partners with k-Purchase to provide a complete purchasing system to streamline the entire purchasing process: -staff requisition - product delivery - business office payment- Quick and easy ordering Integrates with budget and accounting software. k-Purchase is completely free of charge to school districts. Time is money!!! Schools that use the k-Purchase Solution improved their workflow efficiency more than 75%. This translates to over 9,000 hours and $300,000 in savings for the average 2,500-student district. This is the equivalent of gaining five new employees at no cost (or freeing up existing employees to be working on educating students rather than requisitioning forms and chasing down packages) For more information, contact Sean Gibson at (515) 251-5970 ext. #2. 27

28. Mow Mow Mow 28 http://www.isfis.net/Advanced_Mapping_Tool

29. FY 2015 UAB Percent 29

30. At-risk/Dropout Ap changes Jan SBA 30

31. 2016 ISFIS Conference Thursday, June 16, 2016 FFA Enrichment Center 1055 SW Prairie Trail Parkway Ankeny, IA 50023 Registration information and other details will be coming to your inbox soon!

32. 2016 ISFIS Budget Workshops 9:00AM – 1:00PM (One session per day) January 26 - Heartland AEA 11, 6500 Corporate Drive, Johnston, IA 50131 January 27 - Green Hills AEA, 257 Swan Street, Creston, IA 50801 January 28 - Green Hills AEA, 24997 Highway 92, Council Bluffs, IA 51502 February 1 - Prairie Lakes AEA, 23 East 7th St., Spencer, IA 51301 February 2 - Prairie Lakes AEA, 1235 5th Ave. S., Fort Dodge, IA 50501 February 3 - Great Prairie AEA, 3601 West Avenue, Burlington, IA 52601 – Session starts at 1:00PM February 10 - AEA 267, 909 South 12th Street, Marshalltown, IA 50158 February 15 - AEA 267, 3712 Cedar Heights Drive, Cedar Falls, IA 50613 February 16 - AEA 267, 9184 265th Street, Suite B, Clear Lake, IA 50428 February 17 - Grant Wood AEA, 4401 Sixth Street SW, Cedar Rapids, IA 52404 February 22 - Keystone AEA, 1400 Second Street NW, Elkader, IA 52043 February 23 - Mississippi Bend AEA, 729 21st Street, Bettendorf, IA 52722 February 24 - Grant Wood AEA - NEW LOCATION - 200 Holiday Road, Coralville, IA 52241 February 25 - Great Prairie AEA, 103 South A Street, Albia, IA 52531 February 26 - Heartland AEA 11, 6500 Corporate Drive, Johnston, IA 50131 February 29- NW AEA, NEW LOCATION - Le Mars Community Schools, 921 3rd Ave SW, Le Mars, IA 51031 March 1 - NW AEA, NEW LOCATION - Le Mars Community Schools, 921 3rd Ave SW, Le Mars, IA 51031 Register online: http://www.isfis.net/BW_Registrationhttp://www.isfis.net/BW_Registration

33. Pending Dates and Deadlines Jan. 15Dropout Prevention Application Opens Feb. 1Last Date to Request Authority to Charge Administrative Costs to Special Education for the Subsequent Fiscal Year Feb. 5Dropout Prevention Funding Application due Feb. 10AEA Certified Budget Deadline Feb. 12Exhibits and request for SBRC appearance due Feb. 15Last day to bill for first semester tuition Feb. 24DE deadline to approve at-risk/DoP request MAG/MSSA Mar. 31Last date to submit LEA electronic annual audit of prior year to DE and Auditor of State's Office April 19100 th day of Session (end of per diem/expenses) DE Deadlines Calendar (from Calendar tab on DE home page) and from the DE’s School Leader Update and School Business AlertSchool Leader UpdateSchool Business Alert 33

34. http://www.purewow.com/recipes/Spaghetti- with-Avocado-Sauce 34 Ingredients 12 ounces spaghetti 2 avocados--halved, pitted and peeled 1 garlic clove, smashed 1 bunch scallions, roughly chopped Juice of 1 lemon ¼ cup extra-virgin olive oil Salt and freshly ground black pepper ½ cup chopped parsley, for garnish Directions 1. Bring a large pot of salted water to a boil. Add the spaghetti and cook until al dente, 6 to 8 minutes. 2. While the pasta cooks, make the sauce: In the bowl of a food processor, pulse the avocados, garlic, scallions, lemon juice and olive oil until smooth. 3. When the pasta is tender, reserve ½ cup of the cooking water, then drain the pasta. Add the reserved water to the avocado mixture and process until smooth. 4. Add the sauce to the pasta and toss to coat. Season with salt and pepper. To serve, portion the pasta onto plates and garnish with parsley.

35. Questions or Comments? Larry Sigel, ISFIS – Partner Cell: 515-490-9951 Larry.sigel@isfis.net 35 Iowa School Finance Information Services 1201 63 rd Street Des Moines, IA 50311 Office: 515-251-5970 www.isfis.net Margaret Buckton, ISFIS – Partner Cell: 515-201-3755 margaret.buckton@isfis.net