As Iowa City and Linn-Mar prepare for drastic cuts, vouchers draw millions from state

The Iowa City and Linn-Mar school districts face a combined $10 million budget shortfall as the state continues to underfund public schools and funnel millions toward private school tuition.

According to data from the Iowa Department of Education, 471 students who reside within the boundaries of the Iowa City School District received money from Gov. Kim Reynolds’ private school voucher program—called the Students First Education Savings Accounts.

In the 2023-24 school year, the program provided $7,635 in taxpayer funds for qualified students to attend a private institution. In exchange, the student’s would-be district is provided $1,205 to reimburse the lost revenue.

Without reimbursement, vouchers would have cost the Iowa City School District $3,596,085 based on the number of recipients. However, even with the kickback from the state, the Iowa City School District still would have been shorted $3 million due to vouchers.

In nearby Linn-Mar, 231 students received vouchers at a collective cost of $1,763,658 before reimbursement. The state compensation shrinks the deficit to $1.48 million.

While an argument can be made that most of these students would have already attended a private school, they would have done so without additional financial support from Iowa taxpayers that could have gone to public schools.

State funding for public schools is primarily based on enrollment weighting and state cost per pupil. Before the voucher law, districts still received those funds from the state even for students who lived in the district but did not attend a public school (this change takes effect in the 2024-25 school year).  

As both districts prepare to finish their 2024-25 budgets by the state deadline of April 15, each announced drastic cuts in preparation of receiving less state funding. 

Iowa City plans to close its elementary school in Hills, Iowa, to save $1.66 million as it hopes to shave $7.5 million from the budget. As part of its plan to trim $2.5 million out of its upcoming budget, Linn-Mar is cutting 50 staff positions, including 19 full-time teachers.

The money the state is pouring into Reynolds’ voucher program that could have gone to public schools is not the only thing hurting these districts’ finances—underfunding of state supplemental aid, the loss of federal COVID dollars, and declining enrollment are also factors—but it certainly isn’t helping.

The initial projection for the first year of the voucher program was $106.9 million and it wound up costing nearly $128 million—and two-thirds of the recipients already attended a private school.

The first year also restricted access to students who had a household income at or below 400% of the federal poverty guideline, but that restriction will be lowered to 300% in the 2024-25 school year before being phased out entirely in the 2025-26 school year.

Additionally, the amount voucher recipients receive also increases each year. Next school year, participants can expect $7,826 from the state, and Reynolds’ office projects that the state will spend $179 million on vouchers. The initial year two projection was $156.3 million.

During a March Iowa City School Board meeting, board member Lisa Williams pointed the finger at Iowa’s state-level Republican officials for the district’s financial woes.

 “It is the result of chronic and persistent underfunding by the state that has been going on for the past decade,” she said. “It is a direct result of the governor and legislature’s decision to take your tax dollars and divert them away from public schools.”