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Iowa Budget Haggling Unlikely To Restore Proposed School-Fund Cuts

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As Iowa legislators struggled late last week to determine how state funds should be divided in a lean new fiscal year, one of few certainties in the budgeting process was that the schools will lose some of their share.

Although legislative conference committees were haggling over seven of nine budget appropriations bills, a measure appropriating $40 million less than many state educators had anticipated for the public schools was not one of them.

That measure, instead, was waiting for final approval by the Senate and then by Gov. Terry E. Branstad, who had proposed most of its content.

Some legislators were making last-ditch efforts to find additional money for schools. But Representative Arthur C. Ollie, the chairman of the House education committee, held out little hope last week, acknowledging that he was "beginning to see more and more resistance'' among his colleagues to suggestions that more be spent on public schools.

"We are really over a barrel right now,'' said Mr. Ollie, a Democrat. "There is a feeling here that education is getting enough.''

The consequences of that apparent sentiment are already evident as school-district officials throughout the state brace themselves for the loss of state funds they had counted on for the coming year. Some 500 to 1,000 layoff notices have been sent to teachers, according to William L. Sherman, a spokesman for the Iowa State Education Association.

The state also remains behind in its monthly payments of aid to districts for the current fiscal year, with March payments not expected to arrive until after the school year ends in June.

'Still In The Works'

The pressures on the state were evident last week as the House overwhelmingly approved a Senate-passed proposal to cut $8.4 million from human services and $2.6 million from economic development to bring the already scarred budget for the current fiscal year into line.

Meanwhile, Governor Branstad, a Republican, and key legislators continued talks last week on next year's budget. Negotiators are seeking "to develop a plan that we can all live with, but right now it is still all in the works,'' according to a spokesman for the Governor.

The Governor's original $3.2-billion budget proposal included a school-funding formula that would have provided the state's 425 school districts with about $94 million more than this year in state aid. Although that would have been a 7 percent increase, it still would have been about $40 million less than called for under the state education-funding formula.

The formula-based increase in education funding would have exceeded projected growth in state revenue by $45 million, Mr. Branstad said. To bring down the spending, the Governor called for the elimination of sections of the formula that provide extra money to districts that are losing students--the so-called "phantom student'' provision--or are experiencing rapid enrollment gains.

Rural lawmakers warned that the Governor's proposals would leave about a third of the state's districts experiencing no revenue growth, and at a disadvantage in collective bargaining with teachers. A move in the House to undo some of the formula changes was narrowly defeated, however.

The Senate passed the Governor's proposal by a 30-to-20 vote this month.

The House amended the education-funding bill to restore $1.7 million that the Governor had proposed to cut from state payments to districts for services provided to home-schooled students.

The school-aid bill was sent back to the Senate, where it remained last week pending a final floor vote. Although the House amendment was not expected to encounter much resistance, consideration of the bill was stalled as legislators wrangled over other budget issues, such as funding for higher education.

"The Senate is going to sit on it for a while yet,'' Mr. Ollie predicted.

The discussions were complicated, legislators said, by the unknown fiscal impact of a recent ruling by the state supreme court that held that the Governor cannot refuse arbitration with state employees on salary increases during tight budget years.

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