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Education feeling pinch

BY KEVIN HOFFMAN | OCTOBER 14, 2009 7:30 AM

Budget cuts hurting schools

Recent budget cuts in the Iowa legislature have caused funds for high education to be slimmed down:

• Education makes up 55 to 60 percent of Iowa's budget
• Iowa City's K-12 schools are facing even worse budget changes this year
• The UI will reduce its budget by $24.7 milliion
• Gov. Chet Culver recently announced a 10 percent across-the-board budget cut

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It’s called the higher-education “balance wheel.”

In healthy financial times, state officials are said to happily invest in universities, reaping their monetary and social benefits. But as a recession sends state budgets spinning, one of the first areas to see large cuts is higher education.

That’s usually because education funding is one of the largest chunks of a state’s budget. Between 55 and 60 percent of Iowa’s budget is reserved for K-12 schools, the state Board of Regents, and community colleges.

So it’s essentially impossible to avoid trimming this type of funding when education is such a hefty slice of budget expenses, said Sen. Herman Quirmbach, D-Ames. Gov. Chet Culver’s 10-percent across-the-board cut amounts in an almost $60 million reduction for regent universities.

“Higher education doesn’t get cut first but can’t avoid cuts,” said Quirmbach, who is also the vice chairman of the Education Appropriations Subcommittee.

State officials also tend to decrease funding for public universities because the institutions have ways to raise outside revenue: hiking tuition or soliciting donations.

At the same time, such programs as Medicare and Medicaid eat up a significant chunk of state dollars, said Jennifer Delaney, a higher education funding expert at the University of Illinois.

But the resulting volatility adds yet another difficulty for managing a stable flow of cash. Year to year, funding is often unpredictable, and officials don’t know how much they’ll garner from the state, Delaney said.

This makes balancing the budget book difficult, to say the least.

“It’s hard to budget when things are so fluid,” said Sen. Randy Feenstra, R-Hull, who is also a member of the Education Appropriation Subcommittee.

So to avoid fiscal problems like those that some states are facing this year, Delaney said, legislators and university officials should discuss higher-education appropriations and help make future funding more predictable — something Feenstra said he would “love” to see.

He also noted that while it would be difficult for public universities and community colleges to raise property taxes, K-12 schools could use such a method to stream more funding their way.

The Iowa City School District is experiencing larger classes, a reduction in positions, and changes in busing and staffing, said School Board member Toni Cilek. The district faces a loss of about $5.6 million given Culver’s across-the-board, 10-percent cut.

And though Quirmbach said the state Revenue Estimating Conference’s estimates are only assessments, not concrete figures, they can still serve as an indicator of what public-education funds will be available.

“An estimate is just that,” he said. “There is no certainty, but I think over a long period of time, [it] has a pretty good track record.”

The budget, then, brings with it a cloudy future.

“We are really in uncharted territory and I think as the news got worse, we made downward adjustments in our expenses,” Quirmbach said.

The situation is historic, said Sen. Bob Dvorsky, D-Coralville, and that’s why the state is facing unprecedented budget cuts.

“Hopefully, we bottomed out, and our revenue will start picking up again,” he said.


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