Rural school districts battle low SSA rates and declining enrollment

Though the Iowa State Legislature has settled on a 2.3% increase in per-pupil supplemental state aid (SSA) for school districts, superintendents in southeast Iowa are wondering if that will be enough to cover costs.

With the increase, each district will be getting $7,038 per (regular program) student for FY2021 as compared to the $6,880 they are currently getting.

Though the bill allocates close to $100 million more into education, because the SSA is tied to students, districts with fluctuating or declining enrollment may not see the benefits of the increase.

Jeff Maeder, superintendent of the Winfield-Mt. Union Community School District, said ideally, he'd like to see the rate match that of inflation - around 3.5% to 4%.

'We're below that inflation rate and if you combine that with declining enrollment, what SSA is based on, then the total amount you're getting each year is lower, depending on the rate of increase,” Maeder said.

The issue of declining enrollment is one familiar to many of the smaller rural districts in the state. Maeder explained that even with an increase in aid, smaller school districts who lose even just several students will see an overall drop in dollars coming into their district.

'It doesn't take losing many kids to where you're actually getting less money than the previous year. We're talking single digits, so we're getting less money overall, even with the 2% rate, which is what the average has been over the last ten years,” Maeder said.

For Winfield-Mt. Union a 16 student drop from the previous year would mean the 2.3% will not cover the full difference in funding. For schools facing similar issues, they rely on Iowa Code's Budget Guarantee Program, a local property tax levy, as a cushion.

The program ensures districts receive 100% of their previous year's funding with a 1% increase. Maeder said this helps ease the transition of lowered funding and gives districts time to decide how to make adjustments to their budget.

However, if a district sees multiple consecutive years of declining enrollment, their Budget Guarantee also decreases over time.

'You can't go back five years, so if every year, numbers decline, the number you can guarantee each year also declines,” Maeder said.

In an ideal world, Maeder said his district is looking at a rate increase of closer to 10% to maintain their current budget for staffing and costs.

'We know that's not realistic. Everyone gets the same rate increase and we know that's not feasible but that's what it would take,” he said.

Ultimately, less dollars means making cuts on staff and programming.

'You're making some of those difficult decisions, looking at staff costs and program costs,” he said, 'I do think everyone places high value on education in Iowa. It's part of our job to make efficient use of what we're given. We'd like to have more but we certainly appreciate all that is being done for us.”

Pekin Community School District Superintendent, Dave Harper, said continued low SSA rates that have been maintained the last ten years has 'made districts really look at finances and make decisions on what they can and cannot offer.”

'We're happy with 2.3% because it could have been 0. It's better than what we've received in the past. Does it cover all our costs? No. We have to continue to be frugal with funding. Some programs may have to be adjusted or tweaked,” Harper said.

Like Maeder, Harper said his ideal would be in the 3% to 4% range. For Pekin, stable enrollment of students in the past several years has made the SSA rate more workable. Harper said the district has maintained about a 600 resident student enrollment and serves 675 students in total.

'I think when we're getting up around 3%, it really helps us maintain what we're doing and allow us to continue giving our employees a sustainable wage. We can't hire someone at $8 or $9 an hour and expect them to come work for the district,” Harper said.

Harper added the state's decision to continue with a transportation equity bill that would provide assistance to his district and free up more general fund dollars that would usually go toward transporting students, another hurdle many rural districts face.

'Transportation has been a blessing for us. We're way above the state average. We have 21 buses and 12 full time routes across our district,” he explained.

The superintendent added that rural districts are often further away from services, which means finding ways to make programs and experiences available to students through their funding.

'We're our own island out here. There's not a lot of other services available, industry or commercial, various businesses or companies. In Des Moines, students can get work experiences or go to programming at different nearby locations. We're literally in the middle of a cornfield so we have to use money wisely and ensure we're preparing students for tomorrow's world,” Harper said.

Highland Community School District Superintendent Ken Crawford said the state Legislature will 'probably never get away from superintendents wanting 4%,” a rate that hasn't returned since the late-90s and early-2000s.

'Other years, they've given 0%, 2% and 1% so lots of people are caught up in low expectations. 2.3% barely pays the bills. When they say they've given our record money, it's not what they used to do and it's not keeping up with expenses so school districts keep feeling the crunch,” Crawford said.

Like Maeder, Crawford pointed to overall increasing costs that weigh on district budgets like insurance and heating and electricity.

'There's no extra funding [outside of the SSA]. If budget costs are increasing and revenue is not coming in, districts have to make cuts. There's no easy trick to this,” Crawford said.

The superintendent said the district would be looking at any inefficiencies as opportunities for cuts, including water and electrical bills, staffing, bus routes and even class sizes.

'No one is happy about having to make these changes. Not the administrators, the teachers or parents, but we're trying to find a balance,” he said.

Like other small rural districts, Crawford said the two things that most affect his district is a low SSA rate and declining enrollment.

'A steady decline in the last couple years makes it massively difficult. We're always trying to level out enrollment - it's the goal, and look for ways to grow. Low SSA does not do favors for small districts that have enrollment that go up and down each year. In districts that do shrink, it's devastating for them. It kind of feels like smaller districts get poorer and bigger districts get richer,” he said.