1
SF 167 – Supplemental State Aid (LSB2403SV)
Staff Contact: Ron Robinson (515.281.6256) ron.robinson@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 167 modifies and establishes provisions related to the funding of school districts,
including establishing a State supplemental aid (SSA) amount based on a State percent of
growth rate and the categorical State percent of growth rate for the budget year beginning
July 1, 2025 (FY 2026), and provides for other changes to the school aid formula.
The Bill has three provisions with a fiscal impact:
• Establishes a 2.00% State percent of growth rate to be applied to the State cost per pupil
(SCPP) for FY 2026, for an SSA increase of $157 per pupil.
• Establishes a 2.00% State percent of growth rate to be applied to each of the State
categorical cost per pupil amounts for FY 2026.
• Provides additional property tax replacement funding based on the per pupil increase that
results from the establishment of the State percent of growth in FY 2026. The Bill freezes
the additional levy portion of the FY 2026 SCPP at $685 per pupil, regardless of the per
pupil increase for FY 2026.
The Bill takes effect upon enactment.
Background
State Cost Per Pupil. The school aid formula provides funding to school districts and Area
Education Agencies (AEAs) through a mix of State aid and property taxes. In general, funding
is generated on a per pupil basis, with the per pupil amounts providing an overall budget
limitation (or spending authority). Five SCPP funding levels would be increased by a 2.00%
State percent of growth for FY 2026 upon enactment of the Bill.
Figure 1 provides the SSA amounts (also referred to as per pupil growth amounts) and SCPP
amounts for FY 2026 based on a 2.00% growth rate. The SSA amounts will be applied to all
corresponding district and AEA cost per pupil amounts.
Fiscal Note
Fiscal Services Division 2
Figure 1 — SF 167
In addition to the State percent of growth and SSA amounts for FY 2026, enrollments,
weightings, and taxable valuations within each school district have an impact on total school aid
funding, including the amount of State aid and local property tax required to generate the total
funding.
State Categorical Supplements. The State categorical supplements are funded entirely
through State aid and generate funds for each school district and AEA through the school aid
formula on a per pupil basis. The FY 2026 SCPP funding levels for the teacher salary
supplement (district and AEA), professional development supplement (district only), early
intervention supplement (district only), and Teacher Leadership and Compensation (TLC)
supplement (district only) would be increased by a 2.00% State percent of growth for FY 2026.
Figure 2 provides the per pupil growth amounts and SCPP amounts for FY 2026 based on the
Bill.
Figure 2 — SF 167
FY 2025 FY 2026 FY 2026 FY 2026
State Cost State PercentSupplementalState Cost
Per Pupil of Growth State Aid Per Pupil
Regular Program 7,826$ 2.00% 157$ 7,983$
Special Education Program 7,826 2.00% 157 7,983
AEA Special Education Services 341.93 2.00% 6.84 348.77
AEA Media Services 63.74 2.00% 1.27 65.01
AEA Education Services 70.35 2.00% 1.41 71.76
FY 2026 State Cost Per Pupil Calculations FY 2025 FY 2026 FY 2026 FY 2026
State Cost State PercentSupplemental State Cost
Per Pupil of Growth State Aid Per Pupil
Teacher Salary – Districts 671.05$ 2.00% 13.42$ 684.47$
Professional Development – Districts 76.00 2.00% 1.52 77.52
Early Intervention – Districts 82.78 2.00% 1.66 84.44
Teacher Leadership and
Compensation – Districts
377.74 2.00% 7.55 385.29
Teacher Salary – AEAs 35.12 2.00% 0.70 35.82
FY 2026 State Categorical Cost Per Pupil Calculations 3
Additionally, there is a budget guarantee provision for each of the State categorical
supplements, which provides each district and AEA with a minimum of the previous fiscal year’s
level of funding (net of the previous year’s budget guarantee amount). This provision for the
State categorical supplements is funded entirely through State aid.
Property Tax Replacement Payment (PTRP). 2013 Iowa Acts, chapter 121 (Education
Reform Act), included the creation of the PTRP provision to replace local property tax amounts
with State aid. The provision froze the additional levy portion of the SCPP at $750; based on
the State percent of growth enacted during the intervening fiscal years, this provision created
$15 per pupil in property tax relief in FY 2014 and up to $175 per pupil in FY 2023. The
continual growth is a result of the requirement that the per pupil property tax relief of previous
fiscal years carry forward into future fiscal years. Enactment of the Bill would freeze the
additional levy portion of the SCPP to be $685 in FY 2026. The per pupil property tax relief
amount will be based on the State percent of growth enacted for FY 2026. Figure 3 provides
details regarding the SCPP funding levels as provided by a 2.00% growth rate for FY 2026 in
the Bill.
Figure 3 — SF 167
Transportation Equity Program. Iowa Code section 257.16C establishes the Transportation
Equity Program. The Program was created to provide additional funding to school districts for
public school transportation costs that exceed a statewide adjusted average cost per pupil.
Unless otherwise provided, the appropriation increases at the categorical State percent of
growth. Transportation equity payments may buy down transportation costs to the statewide
average cost per pupil for providing transportation to public schools. If funding permits, school
districts with transportation costs per pupil below the statewide average will receive
transportation base funding payments on a per capita basis.
Increase Due to
Supplemental
FY 2025 State Aid RateFY 2026
Regular Program 7,826$ 157$ 7,983$
Unadjusted Additional Levy 908 18 926
PTRP Portion 223 18 241
Fixed Additional Levy Portion 685 0 685
FY 2026 Property Tax Replacement Payment Calculation 4
Assumptions
• Estimates are based on October 2024 certified enrollments and supplementary weightings
for estimated FY 2025, which were approved by the School Budget Review Committee
(SBRC) in December 2024.
• A statewide taxable valuation growth rate of 3.64% for FY 2026 was previously agreed upon
by the Legislative Services Agency (LSA) and the Department of Management. Based on
this assumed rate, the statewide total for the uniform levy is estimated to account for an
increase of $42.9 million (3.71%) toward the school foundation property tax change in
FY 2026. The estimated increase in the uniform levy amount is not affected by the
establishment of the State percent of growth rate. Property tax adjustment aid amounts are
based on the statewide taxable valuation growth factor applied to each school district’s
FY 2026 taxable valuation amount.
• Total State aid includes funding from the State General Fund and other funds appropriated
or deposited in the Property Tax Equity and Relief (PTER) Fund, which is used to provide
additional property tax relief through the school aid formula.
• Establishing an FY 2026 State percent of growth will also affect the amount of funding
generated for the Statewide Voluntary Preschool Program. Funding for the Program is
provided by State General Fund dollars and is included in the overall State aid total.
• Districts eligible for the 101.00% budget adjustment will approve the use of that provision.
• Other legislation may have an impact on the amount of State aid and property tax generated
through the school aid formula.
• The General Fund appropriation to the Transportation Equity Fund will increase by
approximately $0.6 million. The appropriation may grow at the same rate as the categorical
SCPP rate in subsequent years.
5
Fiscal Impact
Figure 4 provides the estimated fiscal impact of the Bill. These provisions include:
• A $7.5 million reduction
1
in State aid to the AEAs (current statute).
• $136.7 million in PTRP funding, an increase of $9.9 million (7.82%) compared to estimated
FY 2025.
• $747.5 million for the State categorical supplements for school districts and AEAs, an
increase of $59.3 million (8.61%) compared to estimated FY 2025. This includes:
• $468.9 million for the teacher salary supplement at the district and AEA levels.
• $39.4 million for the professional development supplement at the district and AEA levels.
• $42.8 million for the early intervention supplement.
• $196.3 million for the TLC supplement.
• $91.1 million for preschool formula funding, a decrease of $0.3 million (-0.36%) compared to
estimated FY 2025. The preschool formula funding is included in the State aid amount but
is not included in the combined district cost total.
• $25.0 million in budget adjustment funding for 159 qualifying districts, an increase of
$9.5 million (61.56%) compared to estimated FY 2025. The budget guarantee adjustment is
calculated at the school district level so that school districts receive 101.00% of their
previous year’s regular budgeted funding. The budget guarantee adjustment is funded
entirely through property taxes.
• The total property tax funds generated through the school aid formula are estimated to be
$1,804.7 million, an increase of $58.2 million (3.33%) compared to estimated FY 2025.
• The total State aid from the General Fund (reflecting the total school aid funding level for
school districts and AEAs generated through the school aid formula) is estimated to be
$3,936.5 million, an increase of $148.9 million (3.93%) compared to estimated FY 2025.
Figure 4 also includes the FY 2026 General Fund appropriation of $31.7 million to the
Transportation Equity Fund, which is not included in the total State aid estimate.
Any legislative action affecting FY 2026 school aid provisions will have an impact on school aid
amounts. Additionally, any variations in the assumptions noted may result in changes in the
FY 2026 estimates provided in Figure 4.
1
Since FY 2018, the General Assembly has further reduced funding to AEAs by an additional amount per year. Historically, the
additional reductions have been included in the annual Standing Appropriations Act. 6
Figure 4 — SF 167
2.00%Set a State Percent of Growth 157 $
0 $ Set additional dollars to SCPP separate from the SSA 0 $
YesSelect if the PTRP is renewed ("No" is current law) 157 $
0 $ Select AEA reduction in addition to current law ($7,500,000) 7,983 $
0 $ Transfer from Taxpayer Relief Fund FY 2026 7,500,000 $
Program Funding: FY 2025 Est. FY 2026 Est. Change % Change
Regular Program District Cost 3,790.5$ 3,842.2$ 51.7$ 1.36%
Regular Program Budget Adjustment 15.5 25.0 9.5 61.56%
Supplementary Weighting (District) 129.7 140.7 11.0 8.50%
Special Education Instruction (District) 536.7 552.5 15.8 2.94%
Teacher Salary Supplement (District) 401.1 450.1 48.9 12.19%
Professional Development Supplement (District) 38.0 39.4 1.4 3.75%
Early Intervention Supplement (District) 41.3 42.8 1.5 3.75%
Teacher Leadership Supplement (District) 189.2 196.3 7.1 3.74%
AEA Special Ed Support District Cost 188.9 191.8 2.9 1.55%
AEA Special Ed Support Adjustment 0.8 1.2 0.3 40.50%
AEA Media Services 33.1 33.6 0.5 1.39%
AEA Ed Services 36.6 37.1 0.5 1.40%
AEA Sharing 0.2 0.2 -0.0 -0.48%
AEA Teacher Salary Supplement 18.6 18.9 0.3 1.72%
AEA Professional Development Supplement 0.0 0.0 0.0
AEA Statewide State Aid Reduction -32.5 -7.5 25.0 -76.92%
Dropout and Dropout Prevention 149.5 149.5 0.0 0.00%
Combined District Cost 5,536.3$ 5,713.8$ 177.5$ 3.21%
Statewide Voluntary Preschool Program 91.4$ 91.1$ -0.3$ -0.36%
State Aid: FY 2025 Est. FY 2026 Est. Change % Change
Regular Program 1,989.4$ 2,025.4$ 36.0$ 1.81%
Supplementary Weighting 108.4 118.8 10.4 9.55%
Special Education Weighting 473.8 487.7 14.0 2.95%
Property Tax Adjustment Aid (1992) 6.4 6.2 -0.2 -3.64%
Property Tax Replacement Payment (PTRP) 126.8 136.7 9.9 7.82%
Adjusted Additional Property Tax - General Fund 24.0 24.0 0.0 0.00%
Statewide Voluntary Preschool Program 91.4 91.1 -0.3 -0.36%
Minimum State Aid 1.3 1.2 -0.1
State Aid from General Fund 3,787.6$ 3,936.5$ 148.9$ 3.93%
Transfer from Taxpayer Relief Fund 13.9$ 0.0$ -13.9$ -100.00%
Transfer from Economic Emergency Fund 8.0 0 -8.0 -100.00%
*Adjusted Additional Property Tax - SAVE Fund 29.0 31.6 2.6 9.06%
Foundation Base Supplement (FBS) 9.7 10.2 0.5 5.63%
Total State Aid (Includes Non-General Fund) 3,848.2$ 3,978.4$ 130.2$ 3.38%
Local Property Tax: FY 2025 Est. FY 2026 Est. Change % Change
Uniform Levy Amount 1,156.5$ 1,199.3$ 42.9$ 3.71%
Additional Levy 590.1 605.4 15.3 2.60%
Total Levy to Fund Combined District Cost 1,746.5$ 1,804.7$ 58.2$ 3.33%
Comm/Ind - Uniform Levy Adjustments 23.9 19.3 -4.7 -19.56%
Comm/Ind - Additional Levy Adjustments 10.1 0.0 -10.1
Miscellaneous Information: FY 2025 Est. FY 2026 Est. Change % Change
Budget Enrollment 483,699 480,665 -3,033 -0.63%
Number of Districts with Budget Adjustment 140 159 19 13.57%
Percentage of Districts with Budget Adjustment 43.08% 48.92%
Statewide Categoricals Total 688.2$ 747.5$ 59.3$ 8.61%
Property Tax Relief Payment Per Pupil 223 241 18 8.07%
Foundation Base Supplement Per Pupil 5 10 5 100.00%
Statewide AEA Funding 245.7 275.3 29.6 12.03%
Transportation Equity Program 31.1 31.7 0.6 2.00%
Notes:
Professional Development Supplement (PDS)
Area Education Agency (AEA)
*Secure an Advanced Vision for Education (SAVE) Fund
Sources: Department of Management (School Aid File), LSA analysis and calculations.
Legislative Services Agency: FY 2026 School Aid Estimates (Statewide Dollars in Millions)
State Supplemental Aid (SSA)
Additional Dollars
Total Change
FY 2026 State Cost Per Pupil (SCPP)
Totals may not sum due to data duplication and exclusion. For example, other funds are provided by State Aid but not included in the
State Aid section because they are represented in the Program Funding section listed above. The Transportation Equity Program is not
included in State Aid totals.
The provision for Minimum State Aid requires that the State provide at least $300 per student.
Total AEA Reduction 7
Sources
Department of Education, Certified Enrollment and Enrollment Projections File
Department of Management, School Aid File
Department of Revenue
LSA analysis and calculations
/s/ Jennifer Acton
February 10, 2025
Doc ID 1521299
The fiscal note for the Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov