Storm Lake School Board Flags Budget Strain Under Two Percent Aid

With state lawmakers holding firm on a two percent school funding increase, the Storm Lake Community School District Board of Education spent part of its meeting yesterday afternoon reviewing a proposed 2026–27 property tax notice they say reflects the growing gap between state aid and what it actually costs to run a district. 

Iowa Gov. Kim Reynolds signed the two percent State Supplemental Aid rate into law last Thursday, bringing per‑pupil funding to $8,148—an increase of about $160 per student, far below the level requested by Iowa education groups.

School Business Official Trudy Pedersen walked board members through the numbers that will appear on the postcard mailed to property owners. 

She said several major budget factors are outside the district’s control this year, including lower Jan. 1, 2025 property valuations, which are used for next year’s budget, and an enrollment drop of about 44 students. That decline puts Storm Lake into the state’s budget guarantee, triggering an additional $143,603 in spending authority.

Pedersen said the district is also constrained by the state’s two percent SSA rate, which falls short of inflation. 

Despite those pressures, she told the board the proposal reflects disciplined planning.

The district is proposing the maximum at‑risk program, a 10 percent instructional support levy, and an eight percent income surtax—unchanged from last year. It will levy $1.75 million of its special education deficit, while reducing the general cash reserve levy to zero. Rising insurance costs are prompting an increase in the management levy.

Superintendent Dr. Stacey Cole said the district technically has authority to levy more, but leaders are trying to avoid pushing additional costs onto residents.

Cole said the state’s two percent funding rate forces districts to shift more services into special education—and ultimately onto local taxpayers.

She noted the school district has already made more than $1 million in cuts, and continues to evaluate every position that opens.

Board member Erika Dierking said the strain is being felt across the district.

Cole said she and other superintendents statewide have been in frequent contact with legislators. The two percent SSA bill—Senate File 2201—passed after House and Senate Republicans negotiated between proposals ranging from 1.75 percent to 2.25 percent, ultimately landing on the governor’s preferred two percent rate. She said advocacy groups and the Urban Education Network are also pushing for changes.

One of the biggest challenges will be public confusion, said Cole. 

Residents recently received 2026 property valuation notices, many of which increased—but those valuations apply to the 2027–28 budget year, not the one now being published.

The district plans to release additional communication to help explain the numbers and the state‑required format. Once the notice is published, administrators will begin finalizing next year’s budget—and warned that more reductions may be brought forward.