Median Age by County 2010 26 Median

Median Age by County 2010 26

Median Age by County 2020 (est) 27

Median Age by County 2030 (est) 28

Median Age 1970 vs. 2030 29

From LSA Factbook 2015 30

From LSA Factbook 2015 31

Limited English Proficient Percent of Enrollment 2008 32

Limited English Proficient Percent of Enrollment 2016 33

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Republican Agenda • Chapter 20/Collective Bargaining HSB 84 and SF 213 introduced Feb. 7 • District Flexibility/Local Control (Home Rule, Categorical Flexibility) • Funded Mandates (Assessment? Summer School? ) • School Choice: Vouchers, Charters, Education Savings Accounts • SSA Process: Earlier / Less $ ($40 million) • Tax Reform (tax relief) “Smaller Smarter Government” 37

SF 166 to Governor Fiscal Note https: //www. legis. iowa. gov/docs/publications/FN/852129. pdf Description Senate File 166 has three provisions with a fiscal impact: • 1. 11% State percent of growth rate to be applied to the State cost per pupil for FY 2018. • 1. 11% State percent of growth rate to be applied to each of the State categorical cost per pupil amounts for FY 2018. • Provides additional property tax relief based on the per pupil increase that results from the establishment of the State percent of growth in FY 2018. The bill requires the additional levy portion of the FY 2018 State cost per pupil amount to be frozen at $750 per pupil, regardless of the per pupil increase for FY 2018. Without enactment of this provision, the increase in the FY 2018 State cost per pupil due to the State percent of growth will include a per pupil property tax increase equivalent to 1/8 th (12. 5%) of the total per pupil increase. • Eliminates requirement that SSA be set in the year preceding the budget year, but keeps the deadline of 30 days after Governor’s budget, so essentially mid February notice for school year starting the next July 1. 38

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How does that get to $40 million? • $108. 95 million total state cost: Minus: • $53. 95 million for TLC • $15 million cut to AEA’s likely in the standings appropriations bill ($18. 75 million AEA restoration is assumed in the Fiscal Note, $15 million that has been reduced annually for several years and the additional $3. 75 million cut from FY 2016) • If this is truly $40 million, expect another $39 -40 million in education to maintain the 43% of GF benchmark 40

There is a cumulative impact to low funding and several years with no time for planning. SF 166 sets 1. 11%. In 7 of the last 8 years, the increase in the cost per pupil has fallen short of cost increases schools typically experience. 41

Revenue Estimating Conference (REC) 42

REC December Meeting 12/12/2016 • Sets the amount to which the 99% expenditure limitation applies (unless it’s lower in March) • 99% limit includes any carry forward ending General Fund balance • Governor and Legislature must create a budget that lives with the 99% expenditure limitation or agree to notwithstand the law requiring the limit (which they won’t) 43

REC December Meeting $7, 607. 3 $7, 556. 3 $ 387. 0 October and December Estimates $290. 8 $395. 4 $344. 4 October and December Estimates Revenue Growth - $'s $7, 700. 0 $400. 0 $7, 308. 1 $7, 600. 0 $350. 0 $7, 211. 9 $300. 0 $7, 500. 0 $250. 0 $7, 400. 0 $200. 0 $150. 0 $7, 300. 0 $100. 0 $7, 200. 0 $50. 0 $7, 100. 0 $0. 0 FY 17 Oct Est FY 17 Dec Est FY 18 Oct Est FY 18 Dec Est 44

REC December Meeting 5. 6% 4. 2% 4. 1% 4. 8% October and December Estimates Growth - % October and December Estimate Changes 6. 0% ($51. 0) ($56. 0) 5. 0% ($61. 0) 4. 0% ($66. 0) ($71. 0) 3. 0% ($96. 2) ($76. 0) ($81. 0) 2. 0% ($86. 0) ($91. 0) 1. 0% ($96. 0) ($101. 0) 0. 0% FY 17 Oct Est FY 17 Dec Est FY 18 Oct Est FY 18 Dec Est Change to FY 2017 Estimate Change to FY 2018 Estimate 45

The Math – how much money? “The REC sets the revenue estimate for the next budget year, then the state’s Expenditure Limitation law takes over. It states that the General Assembly can only spend 99% of the REC’s revenue estimate. That means this year, the maximum amount allowed under law is $7. 4807 billion according to the non-partisan Legislative Services Agency. That figure will be reduced by another $25. 2 million, as both the House, Senate and the Governor agreed to reduce expenditures in the FY 2017 budget (as approved in the deappropriations bill). The maximum that the FY 2018 budget will be is $7. 4555 billion. In order to identify how much of this is additional revenue, we have to subtract this year’s budget. That amount is $7. 2546 billion after enactment of the budget adjustments passed last week. When you subtract $7. 2546 billion from $7. 4555 billion, the new revenue available to the state is $200. 9 million. While I respect the ISEA’s work to advocate on behalf of schools, their numbers must adhere to Iowa’s law. " • • • Assumes no surplus – ever (99% based on revenues plus carry forward) 43% of $200. 9 = $86 M (not $40) Also assumes everything in FY 2017 budget is more important than education. 46

Iowa History of Combined Cash Reserve and Economic Emergency Fund Balance 800. 0 700. 0 600. 0 500. 0 400. 0 300. 0 200. 0 100. 0 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Dollars in Millions • • • Statutory limitations Iowa Code 8. 55 and 8. 56: Maximum 10% of state General Fund (2. 5% EEF & 7. 5% CRF) In FY 2014 Summary of Iowa’s General Fund Budget Analysis, “During budget years that have been negatively affected by economic recessions, the reserve funds have been used to offset General Fund appropriation reductions. ” (page 16) 47 Not so much in last 4 years. Why?

Taxpayer Trust Fund • Established in Iowa Code section 8. 57 E and became effective in FY 2013. • The Trust Fund was created for the purpose of providing tax relief to Iowans from the General Fund surplus that exceeds the amount necessary to “fill up” the state’s Cash Reserve and Economic Emergency Funds. • The statute requires the moneys in the Trust Fund to be used solely for tax relief through an appropriation made by the General Assembly. • In FY 2014, $120 million was refunded to Iowa Income Taxpayers ($60 million for 2013 taxes and $60 million for 2014) 48

How certain is 4. 8% for FY 2018? • Legislature could pass additional tax reform/reduction such as income tax reform, further lowering the base • Economy could lag expectations • Uncertainty at the federal and international levels can further impact the estimate • But that’s what the EEF and CRF provide: cushion against any unknown. 49

https: //www. mercatus. org/publication/weathering-next-recession-how-prepared-are-50 -states 50