The Storm Lake Community School District is preparing for another challenging budget year, and school officials say a combination of declining enrollment, lower property valuations in 2026, and rising costs is forcing the district to consider a property tax levy increase for 2026–27.
A budget notice sent to residents earlier this month outlines a proposed levy of about $19.35 per $1,000 of taxable valuation, an increase of roughly $1.40 from the current rate. That’s nearly an 8 percent jump, and about 13 percent higher than the levy two years ago.
District leaders say several major financial pressures are converging at once. Property valuations used for next year’s budget are down by about $2 million, a decline of nearly half a percent across Storm Lake, Lakeside, and surrounding rural areas. At the same time, enrollment fell by 44 students, which directly reduces the amount of state funding the district receives.
Because state aid is tied to the number of students counted on a single designated day each fall, the enrollment drop triggers the state’s budget guarantee, giving Storm Lake about $143,600 in temporary spending authority to help offset the loss.
The district is also navigating the impact of the state’s 2 percent State Supplemental Aid rate, signed into law earlier this month. That increase brings per‑pupil funding to $8,148, about $160 more per student. Superintendent Dr. Stacey Cole told the school board earlier this month that the 2 percent rate falls well short of inflation and continues to widen the gap between state aid and the actual cost of operating a district.
To help manage the shortfall, Storm Lake is proposing the maximum at‑risk program, a 10 percent instructional support levy, and an 8 percent income surtax, unchanged from last year. The district also plans to levy $1.75 million of its growing special education deficit and increase its management levy due to rising insurance costs, while reducing the general cash reserve levy to zero.
One of the district’s most significant financial pressures continues to be special education. Storm Lake’s special education deficit has climbed to nearly $2 million, almost triple what it was just a few years ago. The district has served a growing number of students requiring specialized services, and state and federal funding does not fully cover those costs, leaving local taxpayers responsible for the remainder.
Cole says they are working to avoid placing additional burden on residents, even though the district technically has authority to levy more. Storm Lake has already made more than $1 million in cuts and is planning another $500,000 in reductions, bringing total cuts to about $1.5 million for the coming year. Every open position is being evaluated as part of that process.
Another factor shaping next year’s budget is a change coming from the Iowa Department of Education. The state plans to add a second enrollment count day in the spring semester to better reflect mid‑year fluctuations. Storm Lake typically sees enrollment rise in the second half of the year, and the additional count could help the district capture funding for students who arrive after the fall count.
The school board will continue budget discussions in the coming weeks as it prepares to finalize the levy and spending plan for the 2026–27 fiscal year.
