Culver Leaves Potential for $400 million Property Tax Increase

Chet Culver’s hype last week about a “big” surprise for K-12 education fell flat.

In his state-of-the-state message, Culver promised to cover just a fraction of the $540 million “promissory note” looming for K-12 funding.

The $540 million hole in the school aid formula for FY11 was created by two across-the-board cuts, one-time TARP money (federal stimulus) money, 2 percent allowable growth and the statewide voluntary preschool program.

Here’s a quick breakdown of the $540 million funding hole:

$238 million – Culvers’ October 2009 – FY10 10 percent ATB
$32 million – Culver’s December 2008 – FY09 1.5 percent ATB
$200 million – One-time TARP (Federal Stimulus funding)
$43 million – 2 percent allowable growth for K-12 school aid
$20 million – Estimated increase in 4 yr old preschool program
$7 million – 2 percent allowable growth for categoricals (Teacher Comp, Class Size, Professional Dev.)

= $542 million – TOTAL K-12 school aid formula funding hole

Culver promised to partially backfill $100 million of the $235 million October ATB cut and to fund 2 percent allowable growth for the K-12 funding formula.

That leaves an overwhelming $400 million that will likely fall on Iowa taxpayers.