Sensible Budget Choices — Education Funding in Iowa
World Class on a Shoestring Budget?
Report notes education in Iowa not out of historical hole

CONTACT: Mike Owen (319) 338-0773, ipp(at)

Download report 10-pg PDF

IOWA CITY, Iowa — Iowa's growing consensus for educational reform must be matched by a better commitment to fund it than in recent years, Iowa researchers said today.

“Governor Branstad's education summit this week served as a focal point for improving student achievement. But this widening interest has coincided with a decrease in overall state education funding over the past 13 years,” said Andrew Cannon, author of the new report for the nonpartisan Iowa Policy Project.

The report shows Iowa's state investments in K-12 schools, community colleges and Regents universities have waned as a share of the economy, measured by personal income.

“Iowa contributes a substantial share of its budget to education, and particularly to K-12 schools,” the report noted. “But as Iowa's general fund has lagged growth in the economy, the education share has as well, actually declining in real dollars through most of the last decade.”

The report found:
— Lower state aid levels for K-12 schools in Iowa are not just a recessionary aberration, but a decade-long trend. State aid, in real dollars, fell by almost $300 million from the 1998 through 2010 fiscal years. While local property taxes also are an important share of school funding, state lawmakers also have held down per-pupil budget authority in recent years, and growth in per-pupil spending overall has lagged that of the nation as a whole.
— A steady decline in community college funding in real dollars even as community college enrollment has swelled. This trend also has shown in community college funding as a share of the economy, falling 17 percent from the 1998 to 2008 fiscal years, with enrollment up 45 percent.
— Despite rising costs of higher education, state funding for the Regents universities has dropped — with or without inflation adjustments. In real dollars, Regents funding has fallen from $967 million in 1998 to $539 million this year, with all major universities seeing declines. At the same time, tuition and fees have spiked.
— Significant temporary help, especially for K-12 schools, from the federal Recovery Act, or stimulus package. The report noted that in Fiscal Year 2010, over $290 million in Recovery Act funds replaced state aid to local schools.
“The stimulus funding took the state off the hook for some of its responsibility in funding schools, and improvement in revenues has allowed the state to catch up,” Cannon said. “In other words, those one-time stimulus funds did exactly as they were designed to do — help states through the rough patch of the recession.

“Without that assistance, especially when the state held per-pupil growth at zero this year, local districts may well have been in worse shape right now, facing layoffs and larger class sizes. The stimulus funds worked.”

The Iowa Policy Project is a nonpartisan, nonprofit policy analysis organization in Iowa City. Reports are at

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