Fiscal Note
Fiscal Services Division
HF 171 – Supplemental State Aid (LSB2094HV)
Staff Contact: Ron Robinson (515.281.6256) ron.robinson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 171 modifies and establishes provisions related to the funding of school districts,
including establishing a State supplemental aid (SSA) amount based on a State percent of
growth rate and the categorical State percent of growth rate for the budget year beginning
July 1, 2023 (FY 2024), and provides for other changes to the school aid formula.
The Bill has three provisions with a fiscal impact:
• Establishes a 3.00% State percent of growth rate to be applied to the State cost per pupil
(SCPP) for FY 2024, for an SSA of $222 per pupil.
• Establishes a 3.00% State percent of growth rate to be applied to each of the State
categorical cost per pupil amounts for FY 2024.
• Provides additional property tax replacement funding based on the per pupil increase that
results from the establishment of the State percent of growth in FY 2024. The Bill requires
the additional levy portion of the FY 2024 SCPP amount to be frozen at $685 per pupil,
regardless of the per pupil increase for FY 2024.
The Bill takes effect upon enactment.
Background
State Cost Per Pupil. The school aid formula provides funding to school districts and Area
Education Agencies (AEAs) through a mix of State aid and property taxes. In general, funding
is generated on a per pupil basis, with the per pupil amounts providing an overall budget
limitation (or spending authority). There are five SCPP funding levels that would be increased
by a 3.00% State percent of growth for FY 2024 with the enactment of this Bill.
Table 1 provides the SSA amounts (also referred to as per pupil growth amounts) and SCPP
amounts for FY 2024 based on a 3.00% growth rate. The SSA amounts will be applied to all
corresponding district and AEA cost per pupil amounts.
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Table 1 — HF 171
FY 2024 State Cost Per Pupil Calculations
FY 2023 FY 2024 FY 2024 FY 2024
State Cost State Percent Supplemental State Cost
Per Pupil of Growth State Aid Per Pupil
Regular Program $ 7,413 3.00% $ 222 $ 7,635
Special Education Program 7,413 3.00% 222 7,635
AEA Special Education Services 323.87 3.00% 9.72 333.59
AEA Media Services 60.38 3.00% 1.81 62.19
AEA Education Services 66.63 3.00% 2.00 68.63
In addition to the State percent of growth and SSA amounts for FY 2024, enrollments,
weightings, and taxable valuations within each school district have an impact on total school aid
funding, including the amount of State aid and local property tax required to generate the total
funding.
State Categorical Supplements. The State categorical supplements are funded entirely
through State aid and generate funds for each school district and AEA through the school aid
formula on a per pupil basis. The FY 2024 SCPP funding levels for the teacher salary
supplement (district and AEA), professional development supplement (district and AEA), early
intervention supplement (district only), and Teacher Leadership and Compensation (TLC)
supplement (district only) would be increased by a 3.00% State percent of growth for FY 2024.
Table 2 provides the per pupil growth amounts and SCPP amounts for FY 2024 based on this
Bill.
Table 2 — HF 171
FY 2024 State Categorical Cost Per Pupil Calculations
FY 2023 FY 2024 FY 2024 FY 2024
State Cost State Percent Supplemental State Cost
Per Pupil of Growth State Aid Per Pupil
Teacher Salary – Districts $ 635.61 3.00% $ 19.07 $ 654.68
Professional Development – Districts 71.99 3.00% 2.16 74.15
Early Intervention – Districts 78.41 3.00% 2.35 80.76
Teacher Leadership and
357.80 3.00% 10.73 368.53
Compensation – Districts
Teacher Salary – AEAs 33.26 3.00% 1.00 34.26
Professional Development – AEAs 3.88 3.00% 0.12 4.00
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Additionally, there is a budget guarantee provision for each of the State categorical
supplements, which provides each district and AEA with a minimum of the previous fiscal year’s
level of funding (net of the previous year’s budget guarantee amount). This provision for the
State categorical supplements is funded entirely through State aid.
Property Tax Replacement Payment (PTRP). 2013 Iowa Acts, chapter 121 (Education
Reform), included the creation of the PTRP provision to replace local property tax amounts with
State aid. The provision froze the additional levy portion of the SCPP at $750; based on the
State percent of growth enacted during the intervening fiscal years, this provision created $15
per pupil in property tax relief in FY 2014 and up to $175 per pupil in FY 2023. The continual
growth is a result of the requirement that the per pupil property tax relief of previous fiscal years
carry forward into future fiscal years. Enactment of this Bill would cause the additional levy
portion of the SCPP to be $685 in FY 2024. The per pupil property tax relief amount will be
based on the State percent of growth enacted for FY 2024. Table 3 provides details regarding
the SCPP funding levels as provided by a 3.00% growth rate for FY 2024 in this Bill.
Table 3 — HF 171
FY 2024 Property Tax Replacement Payment Calculation
Increase Due to
Supplemental
FY 2023 State Aid Rate FY 2024
Regular Program $ 7,413 $ 222 $ 7,635
Unadjusted Additional Levy 860 26 886
PTRP Portion 175 26 201
Fixed Additional Levy Portion 685 0 685
Transportation Equity Program. Iowa Code section 257.16C establishes the Transportation
Equity Program. The Program was created to provide additional funding to school districts for
public school transportation costs that exceed a statewide adjusted average cost per pupil.
Unless otherwise provided, the appropriation increases at the categorical state percent of
growth. Transportation equity payments may buy down transportation costs to the statewide
average cost per pupil for providing transportation to public schools. If funding permits, school
districts with transportation costs per pupil below the statewide average will receive
transportation base funding payments on a per capita basis.
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Assumptions
• Estimates are based on October 2022 certified enrollments and supplementary weightings
for FY 2023, which were approved by the School Budget Review Committee (SBRC) in
December 2022.
• A statewide taxable valuation growth rate of 5.45% for FY 2024 was previously agreed upon
by the Legislative Services Agency (LSA) and the Department of Management. Based on
this assumed rate, the statewide total for the uniform levy is estimated to account for an
increase of $58.3 million (5.45%) toward the school foundation property tax change in
FY 2024. The estimated increase in the uniform levy amount is not affected by the
establishment of the State percent of growth rate. Property tax adjustment aid amounts are
based on the statewide taxable valuation growth factor applied to each school district’s
FY 2024 taxable valuation amount.
• Total State aid includes funding from the State General Fund and other funds appropriated
or deposited in the Property Tax Equity and Relief (PTER) Fund, which is used to provide
additional property tax relief through the school aid formula.
• Establishing an FY 2024 State percent of growth will also affect the amount of funding
generated for the Statewide Voluntary Preschool Program. Funding for the Program is
provided by State General Fund dollars and is included in the overall State aid total.
• Districts eligible for the 101.00% budget adjustment will approve the use of that provision.
• Other legislation may have an impact on the amount of State aid and property tax generated
through the school aid formula.
• The General Fund appropriation to the Transportation Equity Fund will increase by
approximately $0.9 million. Starting in FY 2024, the appropriation may grow at the same
rate as the categorical SCPP rate in subsequent years.
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Fiscal Impact
Table 4 provides the estimated fiscal impact of this Bill. These provisions include:
• A $7.5 million reduction1 in State aid to the AEAs (current statute).
• $114.8 million in PTRP funding, an increase of $15.3 million (15.43%) compared to
FY 2023.
• $592.7 million for the State categorical supplements for school districts and AEAs, an
increase of $18.0 million (3.13%) compared to FY 2023. This includes:
• $336.1 million for the teacher salary supplement at the district and AEA levels.
• $38.1 million for the professional development supplement at the district and AEA levels.
• $39.1 million for the early intervention supplement.
• $179.4 million for the TLC supplement.
• $90.2 million for preschool formula funding, an increase of $1.9 million (2.21%) compared to
FY 2023. The preschool formula funding is included in the State aid amount but is not
included in the combined district cost total.
• $5.4 million in budget adjustment funding for 71 qualifying districts, a decrease of
$3.4 million (38.73%) compared to FY 2023. The budget guarantee adjustment is
calculated at the school district level so that school districts receive 101.00% of their
previous year’s funding. The budget guarantee adjustment is funded entirely through
property taxes.
• The total property tax funds generated through the school aid formula are estimated to be
$1,716.9 million, an increase of $48.4 million (2.90%) compared to FY 2023.
• The total State aid from the General Fund (reflecting the total school aid funding level for
school districts and AEAs generated through the school aid formula) is estimated to be
$3,692.5 million, an increase of $123.9 million (3.47%) compared to FY 2023. Any
legislative action affecting FY 2024 school aid provisions will have an impact on school aid
amounts. Additionally, any variations in the assumptions noted may result in changes in the
FY 2024 estimates provided in Table 4.
The total General Fund appropriation in Table 4 provides the additional fiscal impact of
HF 171. This also includes the FY 2024 General Fund appropriation of $30.3 million to the
Transportation Equity Fund, which is not included in the total State aid estimate.
1Since FY 2018, the General Assembly has further reduced funding to AEAs by an additional amount per year. Historically, the
additional reductions have been included in the annual Standing Appropriations Act.
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Table 4 — HF 171
Legislative Services Agency: FY 2024 School Aid Estimates (Statewide Dollars in Millions)
State Percent of Growth 3.00% Statutory AEA Reduction $ 7,500,000
State Supplemental Aid $ 222 Additional AEA Reduction 0
State Cost Per Pupil $ 7,635 Total AEA Reduction $ 7,500,000
Program Funding: FY 2023 Est. FY 2024 Est. Change % Change
Regular Program District Cost $ 3,605.1 $ 3,719.3 $ 114.3 3.17%
Regular Program Budget Adjustment 8.9 5.4 -3.4 -38.73%
Supplementary Weighting (District) 111.1 120.6 9.4 8.47%
Special Education Instruction (District) 501.0 525.0 24.0 4.80%
Teacher Salary Supplement (District) 308.3 317.9 9.6 3.12%
Professional Development Supplement (District) 34.9 36.0 1.1 3.10%
Early Intervention Supplement (District) 37.9 39.1 1.2 3.08%
Teacher Leadership Supplement (District) 174.0 179.4 5.5 3.14%
AEA Special Ed Support District Cost 179.2 185.3 6.0 3.37%
AEA Special Ed Support Adjustment 1.0 0.6 -0.4 -39.29%
AEA Media Services 31.4 32.3 1.0 3.17%
AEA Ed Services 34.6 35.7 1.1 3.16%
AEA Sharing 0.2 0.0 -0.2 -100.00%
AEA Teacher Salary Supplement 17.6 18.2 0.6 3.43%
AEA Professional Development Supplement 2.1 2.1 0.1 3.51%
AEA Statewide State Aid Reduction -24.6 -7.5 17.1 -69.46%
Dropout and Dropout Prevention 139.9 139.9 0.0 0.00%
Combined District Cost $ 5,161.8 $ 5,349.5 $ 187.7 3.64%
Statewide Voluntary Preschool Program $ 88.3 $ 90.2 $ 1.9 2.21%
State Aid: FY 2023 Est. FY 2024 Est. Change % Change
Regular Program $ 2,118.7 $ 2,155.4 $ 36.7 1.73%
Supplementary Weighting 98.1 106.4 8.3 8.46%
Special Education Weighting 442.2 463.4 21.2 4.80%
Property Tax Adjustment Aid (1992) 6.9 6.5 -0.4 -5.45%
Property Tax Replacement Payment (PTRP) 99.4 114.8 15.3 15.43%
Adjusted Additional Property Tax - General Fund 24.0 24.0 0.0 0.00%
Statewide Voluntary Preschool Program 88.3 90.2 1.9 2.21%
State Aid from General Fund $ 3,568.6 $ 3,692.5 $ 123.9 3.47%
*Excess from SAVE Fund 23.4 24.7 1.2 5.28%
Foundation Base Supplement (FBS) 2.8 5.7 2.9 100.99%
Total State Aid (Includes Non-General Fund) $ 3,592.0 $ 3,722.9 $ 130.8 3.64%
Local Property Tax: FY 2023 Est. FY 2024 Est. Change % Change
Uniform Levy Amount $ 1,069.5 $ 1,127.8 $ 58.3 5.45%
Additional Levy 598.9 589.1 -9.9 -1.65%
Total Levy to Fund Combined District Cost $ 1,668.4 $ 1,716.9 $ 48.4 2.90%
Comm/Ind - Uniform Levy Adjustments -6.1 0.0 6.1 -100.00%
Comm/Ind - Additional Levy Adjustments -4.4 0.0 4.4 -100.00%
Miscellaneous Information: FY 2023 Est. FY 2024 Est. Change % Change
Budget Enrollment 485,630 486,476 845 0.17%
State Cost Per Pupil $ 7,413 $ 7,635 $ 222 2.99%
Number of Districts with Budget Adjustment 81 71 -10 -12.35%
Percentage of Districts with Budget Adjustment 24.77% 21.85%
Statewide Categoricals Total $ 574.7 $ 592.7 $ 18.0 3.13%
Property Tax Relief Payment Per Pupil 175 201 26 14.86%
Foundation Base Supplement Per Pupil 5 10 5 100.00%