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Policy Points from Iowa Fiscal Partners

Posts tagged tuition

Steps forward in ’14 — more ahead?

IFP News: Statement on 2014 Legislative Session

Iowa families took a couple of important steps forward in the 2014 legislative session, but those steps paled in comparison to lawmakers’ refusal to address long-term funding challenges for critical services.

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IOWA CITY, Iowa (May 7, 2014) — The Iowa Fiscal Partnership released the following statement today about the 2014 session of the Iowa Legislature:

Iowa families took a couple of important steps forward during the just-completed legislative session, while more — and more significant — advancements will have to wait as the General Assembly and Governor continue to focus excessive attention on giveaways to business.

Steps forward paled in comparison to lawmakers’ refusal to address long-term funding challenges for critical services including K-12 and early childhood education, and Child Care Assistance, among others.

And, inexplicably, lawmakers left Iowa’s minimum wage at a paltry $7.25 — stagnant now for over six years. Failure to improve the livelihoods of Iowa’s low-wage workers puts greater demands on families because public supports are not sufficiently funded. Eligibility for Child Care Assistance in particular has been held too low to help many low-income working families — one of the lowest eligibility ceilings in the country — and lawmakers passed up an opportunity to improve that.

One bright note from the session was that lawmakers approved increased eligibility for child care assistance to working parents who also go to school part time. They also passed a small improvement in the child and dependent care credit. Iowa Fiscal Partnership research has shown child care is expensive for low-income families, and is a major barrier for parents seeking to improve their education.

Another bright spot is that the state will provide 4 percent increases to Iowa, Iowa State and Northern Iowa to meet a commitment by the Board of Regents to freeze tuition for a second straight year. Likewise, community colleges received a 4.1 percent funding boost to restrain tuition. It is important to note, however, that many more years of increased funding will be needed to reverse the long-term trends that have turned tuition into the majority source of support for the Regents institutions and the community colleges. This causes rising debt for families, reduces access to higher education and lessens Iowa’s commitment to opportunity for all.

On the other end of the education spectrum — 4-year-old preschool — only the Senate passed legislation to help eliminate waiting lists and expand access to more families, so it will be at least next year before that can be considered.

Funding is critical to improvements in many areas. For the environment, the Resource Enhancement and Protection Act (REAP) has been around for a quarter century but only once funded at its authorized $20 million. If the Governor signs improvements passed by the Legislature, conservation and environmental advocates will see it at $25 million.

No noteworthy gains were made or seriously attempted to reform corporate tax credits and other tax breaks that have become a significant and chronic drain on Iowa’s treasury with little apparent return.

While poorly targeted “incentives” to business remain a serious problem for Iowa, one limited credit for solar power improvements was expanded and should be able to stand the kind of return-on-investment review that needs to be applied to all business tax credits.

It remains a contradiction that lawmakers can give away tens of millions of dollars to profitable businesses that pay no state income tax — without a vote and without concern about the impact on the budget — yet leave town claiming they cannot set school aid as required by law because they don’t know how much money will be coming in. If education is a priority, the money can be found from the pool now being given away before it hits the treasury.

The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit Iowa organizations, IPP in Iowa City and the Child & Family Policy Center in Des Moines. Reports are available at www.iowafiscal.org.

Why the tuition freeze matters

Posted May 2nd, 2014 to Blog

A bright spot in the just completed session of the Iowa Legislature is that lawmakers for the second year in a row have assured a tuition freeze at Iowa’s Regents universities.

The 4 percent increase in state funding for FY2015 is an important investment. It means current students will be able to keep a little more money in their pockets, and prospective students will have greater access to higher education at the University of Iowa, Iowa State University or the University of Northern Iowa.

For now, the state has stalled its trend toward sharp tuition increases — a trend similar to what’s happened at public colleges and universities across the country. A new report from the Center on Policy and Budget Priorities found that from FY2008-FY14 state funding per student at Iowa’s Regent universities decreased by 23.8 percent, leading to a 12.2 percent change in average tuition after adjusting for inflation — $854 more a year per student.

It’s a simple equation: When state funding goes down, tuition goes up and/or resources to help students are reduced. Iowa Fiscal Partnership research has shown these trends in our state, as noted in the graph below covering tuition vs. state support of Regents institutions from 2001-13.

tuitionvsstateaid

These trends shift the cost of education from the state to the students and their families. The result is that students take on more debt or have fewer choices among institutions, if they choose to attend at all. At low incomes, some students may simply choose not to enroll even though education might be what they want, and necessary to their career goals.

Excessive student loan debt has broad economic implications. It is associated with lower rates of homeownership among young adults, it can create enough stress to decrease the probability of graduation and reduce the chance that graduates with majors in science, technology, engineering and mathematics will go on to graduate school.

The economic importance of higher education will continue to grow, as getting a college degree is increasingly a prerequisite to enter the middle class. And beyond those who receive the degree, everyone in the community benefits when more residents have college degrees. An area with a highly educated workforce attracts better employers who pay better wages and this can boost an area’s economic success.

Strong state revenues offer a time to reinvest in higher education, and to return funding of services to pre-recession levels.

IPP-gibney5464  Posted by Heather Gibney, Research Associate


IFP News: Statement on Governor’s Address

Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

PDF (1 page)

IOWA CITY, Iowa (Jan. 14, 2014) — The Iowa Fiscal Partnership released the following statement today about Governor Branstad’s Condition of the State address in Des Moines:

Two high points stand out from Governor Branstad’s address today.

First, the Governor does not appear to be supporting new initiatives for general reductions in Iowa corporate or individual income taxes. These taxes already are low and quite competitive in the nation and region, as Iowa Fiscal Partnership analysis has demonstrated. Iowans cannot afford new raids on the General Fund when many public services have not been restored to pre-recession levels.

Second is a commitment to higher education, with the second year of a tuition freeze that will help undergraduate students at the state’s Regents universities. The Governor is right in targeting student debt as a challenge to an Iowa Dream of opportunity and prosperity.

The Governor did not close the door on — but also did not address — several other issues important to moderate- and middle-income Iowans.

Among those: improving the minimum wage, now starting a seventh year at $7.25; combating wage theft; boosting child-care assistance to make it easier for low-wage workers to take a job or seek new education or training. These issues have existed since before the Governor took office, and such moves to improve economic prospects for families and reduce poverty, would be a good followup to arguably the most important legislation he signed last year: doubling the Earned Income Tax Credit.

Despite recently strong revenues, Iowa faces critical fiscal challenges now and in the coming years due in part to the bipartisan property-tax cuts passed last year. While the Governor characterized this as “relief” for “middle-class families,” it is important to note that the property-tax package was almost exclusively geared to business — including large retailers that did not need the breaks. As IFP has noted,[1] these breaks and others pose many challenges for critical public services in the years to come.

The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit Iowa organizations, IPP in Iowa City and the Child & Family Policy Center in Des Moines. Reports are available at www.iowafiscal.org.


[1] “Iowa Budget Dilemma for 2014,” Iowa Fiscal Partnership, Jan. 13, 2014. http://www.iowafiscal.org/iowa-budget-dilemma-for-2014/