Mayor, superintendent discuss state funding challenges during ‘Tuesday Talks’
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The state has created challenging financial hurdles for local governments and school boards, according to Mayor Mike Ladehoff and Marshalltown Community School District Superintendent Theron Schutte. The duo spoke about the financial struggles of the city and the schools during Tuesday Talks, hosted by the Marshall County Democrats, at Legends American Grill.
Ladehoff started his talk by touting recent achievements within Marshalltown – the streets are getting fixed, the Apgar Water Plaza and the Emerson Bridge/Ann Keyser Trailhead opened and the Center Street viaduct should be reopened at the end of November. While the progress in Marshalltown is positive, the mayor has some fear.
"What scares me now is the economic environment we are in," he said. "When the state puts a cap on tax rates . . . I can see why you would not want tax rates to rise too fast, but if you set it too low, it's unrealistic."
The state has placed a two percent cap that partly affects the city's general fund, which is used for payroll. Last year, the city used almost $1 million of Local Option Sales Tax (LOST) in order to keep employees.
This year, the Homestead Exemption – which reduces the taxable value of a residence – will take $850,000 from the general fund, according to Ladehoff. Last month, building permits brought in more than $100,000, which helps but does not make up for the remaining $750,000.
"When you take the general fund, and you say we're $200,000 short and it's 95 percent [payroll,] what do you do?" Ladehoff asked. "You lay off the people who have been providing services."
The state has also taken away levies from cities.
"This town voted for a 10-cent levy for the library, because we wanted longer hours and opened on Sunday," Ladehoff said. "They run on 'We cut your taxes.' They're going to say with the property tax exemption they cut your property tax. It doesn't affect them at all."
He said he is for tax breaks, but the state officials should feel it, too.
"Don't kill the people who may have to lay off police officers," he said. "Right now in the City of Marshalltown, we have no department that is fully staffed. This next budget is going to be very tough."
Ladehoff said his standard is when someone is hired to do a job, they need to do it. And what the legislators are doing is not working when it comes to schools or attracting people and businesses to move to Iowa.
"We could literally not vote for anybody in the state house, it sits empty . . . it wouldn't change a thing if nobody was there," he said. "We should have expectations for all of our elected officials. We want you to go down there and fix things, and we want these things fixed. You can give tax breaks and make yourselves look good, even though you're hurting all of the towns and cities."
Even with the progress and improvements within Marshalltown, Ladehoff said it is important to remember it will end, and so the momentum has to continue for as long as possible.
"When it's done, we got what we got," he said. "And I think we can get a lot more."
School district
Schutte spoke after Ladehoff finished, telling the roughly 25 attendees that when it comes to school funding, state officials are correct in saying education gets the "lion's share" of funds.
"The problem is, the amount of state funds has been less and less for at least as long as Gov. Branstad came back to office," Schutte said, adding the former governor suggested school districts not receive more than a two percent increase in funding every year.
During the first half of Schutte's career, he said districts would usually receive a four percent increase.
"The challenge is the cost of living and employees haven't gone down," Schutte said. "With that being 80 percent of our budget, we've had to do some things we didn't have to do in the past."
One state action which he finds frustrating is the Education Savings Accounts (ESAs) which sends public money to private schools. If the program would have been limited to lower income families who could not afford tuition, Schutte added it would not be as frustrating.
"When they decided to, over a three-year period, fund it for anyone and everyone, that's when I had the problem," he said. "At the same time the hundreds of millions of dollars were going to that, the [state] was telling the public schools, 'We don't have enough money to give you what would be adequate funding.'"
Schutte said Amendment 1, which will be determined by Iowa voters on Nov. 3, will prohibit an increase in income taxes unless there is a two-thirds majority approval in both legislative chambers.
"Largely, Amendment 1 will benefit the wealthiest and the biggest corporations by making it extraordinarily difficult in creating an equitable means for which people pay and help support things happening," he said. "It also puts more pressure on us regarding property taxes and sales taxes."
Schutte reminded attendees that last year the legislature decided to carve 25 percent of sales tax during the next five years, which is something public school districts utilize. He said that will probably mean it will add another five years onto the 20-year payoff of the $106 million Reimagine Miller project.
"This has not been a good time, in the last 15 years, for education," Schutte said. "To be honest, in the last five or six years, we just keep our heads down and hope they don't look in our direction. They make a lot of new laws without consulting educators, and then they don't worry about the ramifications."
Based on conversations he has had with local legislators, he believes there is a lot of pressure placed on them to vote in accordance with their parties, rather than their conscience or in the interest of constituents.
The more the state government limits the ability of school districts to make changes, the more difficulties will be encountered.
"The state budget, from everything I've heard, is not heading in a good direction," Schutte said. "There's going to be some reckoning that happens, and we're already feeling that. Last year, we reduced our budget by about $2 million. With a large budget like what we have, as long as you're not cutting year after year, you can do that so it doesn’t negatively impact kids and employees. [Now] we're looking at, based on the funding model and declining enrollment, reducing the budget for next year by $5 million. There's no way we're going to be able to do that without having fewer employees."
Contact Lana Bradstream at 641-753-6611 ext. 210 or lbradstream@timesrepublican.com.