Legislature sends school funding bill to Governor

Greetings from Capitol Hill:
K-12 Funding
On Tuesday, March 22, the Iowa House and Iowa Senate reached an agreement on K-12 education funding for the upcoming school year (2016-2017). A joint conference committee has agreed to provide an increase of 2.25 percent to K-12 schools, which amounts to approximately $90 million. In addition, we allocated $53 million to the Teacher Leadership and Compensation program and approximately $10 million for property tax abatement in the school funding formula. This will be the sixth year in a row that schools have received an increase in funding. K-12 schools are receiving 87 percent of all new available funds for 2016. In the last four years I have voted for a total of $670 million of new money for our K-12 school systems. Unfortunately, approximately $66 million of this amount has been vetoed or not used. In summary, over the last four years I have voted for a total increase in school funding of 4.1 percent and 3.8 percent of that total has been, or will be, distributed to the schools.     
Over the last four years, we have done a number of things that have given our local school districts more control over their resources. In addition, we have provided other funding resources through the option of using sharing money for students, restructuring the at-risk levy and drop out levy, using the physical plant and equipment levy for transportation equipment and using the management levy for mediation and arbitration costs. Our hope is that these measures will provide additional flexibility and support to our local school districts.
School transportation costs in northern Iowa are above the state average in all but one district. Legislation to relieve this burden is still on the docket. Fixing the inequity in state aid to various schools is still a possibility.
Section 179 Coupling Resolved
On March 10 the House and Senate reached an agreement regarding coupling with federal tax code. The agreement between House Republicans and Senate Democrats includes House Republican’s tax coupling bill which provides $95.7 million in tax relief to Iowans. That money goes directly to the taxpayers. The bill couples with everything except bonus depreciation in tax year 2015. It does not couple in tax year 2016 but leaves that decision to the 2017 Legislature. There is a $95.7 million impact on FY 2016 revenue/ending balance.  Additionally, $86.5 million is added to FY 2017 on-going revenue with roughly $55 million of that available for appropriation under the state’s expenditure limitation law.
The other part of the agreement involves the so-called “consumables” issue. HF 2443 from 2014, which had broad bipartisan support, clarifies the definition of replacement parts, including the supplies consumed during the manufacturing process as exempt from sales and use tax. Advocates argue that Iowa’s manufacturers are double taxed under the current law and administrative rules. The agreement ends this double taxation. It also allows manufacturers who pay good wages and benefits, to invest in equipment and employees.
I appreciate your support and thank you for allowing me the opportunity to serve you. Please feel free to contact me with any questions or comments.
Sincerely, Rep. Tedd Gassman

Rep. Gassman is on the Environmental Protection, Labor, and Local Government Committees, and serves as the Vice Chair of the Education Committee. He also serves on the Administration and Regulation Appropriations Subcommittee. His district includes Emmet County, Winnebago County, and the northern parts of Kossuth County, including Algona. You can contact him at tedd.gassman@legis.iowa.gov