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SF 444 – School District Reorganization Incentives (LSB1478SV)
Staff Contact: Ron Robinson (515.281.6256) ron.robinson@legis.iowa.gov
Fiscal Note Version – New
Description
Senate File 444 extends the whole grade sharing supplementary weighting and reorganization
incentives until July 1, 2030 (FY 2031).
Background
The Bill is the fourth extension of the provisions currently in statute.
2019 Iowa Acts, chapter 101 (School Districts — Whole Grade Sharing, Reorganization, or
Dissolution Incentives Act), extended school district reorganization incentives until the end of
FY 2024. The current provisions, originally enacted in 2001 and effective for school
reorganizations between FY 2002 and FY 2007 (2001 Iowa Acts, chapter 126), were
reauthorized for school reorganizations between FY 2008 and FY 2014 during the 2007
Legislative Session (2007 Iowa Acts, chapter 130). Previously, the provisions were
reauthorized for FY 2015 through FY 2020 during the 2014 Legislative Session (Iowa Code
section 257.11A). Incentives include the following:
• Uniform levy rate reductions replaced with State aid. The uniform levy rate is $5.40 per
$1,000 of assessed valuations. The rate reductions are phased out over a three-year
period. For districts with enrollments of fewer than 600 students, the uniform levy rate will
be reduced $1.00 in year one, $0.50 in year two, and $0.25 in year three. If a school district
that has an enrollment exceeding 600 students merges with a district that has an enrollment
of fewer than 600 students, then the larger district will instead receive a reduction in the
uniform levy total equal to the reduction in the uniform levy total that the smaller district
receives. For example, if the rate reduction in year one generated a reduction in the uniform
levy totaling $500,000, the district with an enrollment that exceeded 600 would have its
portion of the uniform levy reduced by $500,000.
• Whole grade sharing and joint employment. School districts are eligible for
supplementary weighting for pupils who attend class in another school district, attend class
taught by a teacher employed by another school district, or attend class taught by a teacher
jointly employed by two or more school districts that share the services of that teacher.
• Reorganization supplementary weighting. School districts that have a whole-grade
sharing agreement, meet specific requirements, and reorganize by FY 2024 may receive
supplementary weighting equal to the whole-grade supplementary weighting amount
received in the year prior to the reorganization for resident students. Districts can receive
reorganization incentive supplementary weighting for up to three years. However, the
combination of whole-grade sharing supplementary weighting and reorganization incentive
supplementary weighting cannot exceed six years.
The supplementary weightings and reorganization incentives are funded through a mix of State
aid and property taxes, which are calculated through the school finance formula. State aid costs
associated with each of these supplementary weightings have varied due to the size and
number of districts that are eligible to receive supplementary weighting. The property tax
portions associated with each of these supplementary weightings have varied due to the size
Fiscal Note
Fiscal Services Division 2
and number of districts that are eligible to receive supplementary weighting. Uniform levy
reductions are paid by State aid through the school finance formula. The State aid cost for the
uniform levy incentives depends on the enrollment of a district and the taxable valuation of a
district.
School Reorganizations/Dissolutions Since 2002
Prior to the enactment of reorganization incentives, there were 371 school districts in FY 2002.
The response to the initial reorganization incentives was limited, with the number of districts
decreasing by nine between FY 2002 and FY 2008, a reduction of 2.4%. However, since the
reauthorization of the incentives, reorganizations have increased and the number of districts in
FY 2025 has dropped to 325, a 12.4% reduction since FY 2002. Enrollment declines have also
contributed to the reduction in the number of school districts. Figure 1 shows a timeline of the
number of districts since FY 1995 and when reorganization incentives were enacted and
reauthorized.
Figure 1 — Number of School Districts in Iowa — FY 1995 - FY 2025
State Aid
Figure 2 shows the amount of State aid provided in uniform levy reductions, the amount of
State aid provided for reorganization incentives, and whole grade sharing and joint employment
for FY 2005 through FY 2025. Since FY 2004, State aid costs for uniform levy reduction have
totaled $18.6 million, the estimated State aid cost for reorganization incentives has totaled
$19.7 million, whole grade sharing and joint employment has totaled $17.0 million. A total cost
of $55.3 million occurred during the same time frame.
371 362
336
325
0
50
100
150
200
250
300
350
400
1995 1999 2003 2007 2011 2015 2019 2023
Fiscal Year
Reorganization
incentives begin
First reauthorization of
reorganizationincentives
Second reauthorization of
reorganizationincentives
Third reauthorization of
reorganizationincentives
Reductionof 9 districts (2.4%)
Reductionof 26 districts (7.2%)Reductionof 11 districts (3.3%) 3
Figure 2 — State Aid Costs by Category (in Millions)
Assumptions
The number of districts that will be eligible to receive supplementary weighting for whole grade
sharing and joint employment, and the number of districts that start or continue to make
progress toward reorganization before July 1, 2030 (FY 2031) is unknown.
Fiscal Impact
The estimated fiscal impact of all provisions in the Bill is currently unknown and will depend on
the number of districts eligible to receive supplementary weighting for whole grade sharing and
joint employment, as well as the number of districts that start or continue to make progress
toward reorganization.
Sources
Department of Education
Department of Management
LSA calculations
/s/ Jennifer Acton
March 4, 2025
Doc ID 1523553
The fiscal note for this 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 $0.4
$1.3
$1.2
$0.7
$1.6
$1.7
$1.3
$3.2
$3.8
$3.9
$5.5
$4.4
$4.0
$2.9
$4.8
$4.1
$3.4
$3.6
$2.1
$1.4
$0.0
0.0
1.0
2.0
3.0
4.0
5.0
$6.0
200520062007200820092010201120122013201420152016201720182019202020212022202320242025
Fiscal Year
Whole Grade Sharing/Joint
Employment
Reorganization Incentives
Uniform Levy Reductions