Storm Lake School Board Flags 2026-27 Budget Strain from 2% Aid

Storm Lake Community School District officials told the school board that a two percent State Supplemental Aid increase signed by Gov. Kim Reynolds leaves a funding gap as they prepare the 2026-27 property tax notice. The package before the board includes levying $1.75 million of a special education deficit and reducing the district’s general cash reserve levy to zero as leaders try to blunt the impact of lower property valuations and rising costs.

At the March 4-5, 2026 meeting cycle, School Business Official Trudy Pedersen walked board members through the numbers that will appear on the postcard mailed to property owners and outlined the district’s revenue picture. Pedersen reviewed how the governor’s action brings per-pupil state funding to $8,148 - an increase of about $160 per student, far below the level requested by Iowa education groups, and short of inflation. Despite those pressures, she told the board the proposal reflects disciplined planning.

The district faces a cluster of outside pressures tied directly to next year’s budget calculations. Lower Jan. 1, 2025 property valuations will be used for the 2026-27 budget, shrinking the local tax base, and enrollment has declined by about 44 students. That decline puts Storm Lake into the state’s budget guarantee, triggering an additional $143,603 in spending authority even as overall revenues remain constrained by the two percent SSA rate.

To balance those forces, the board packet outlines a mix of unchanged and adjusted levies. 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, the packet notes, although the specific dollar amount of that increase was not disclosed at the meeting.

Superintendent Dr. Stacey Cole framed the district’s posture toward tax increases: the district technically has authority to levy more, but leaders are trying to avoid pushing additional costs onto residents. That line underscored why administrators kept several levies level and chose to use reserve and deficit levies rather than seek broader new property tax increases.

Board members reviewed the proposed 2026-27 property tax notice during the March 4-5 meeting cycle; the postcard Pedersen reviewed will go to property owners with the specific levy figures. With per-pupil state aid set at $8,148 and local valuations down, Storm Lake’s leaders are recalibrating levy choices now while signaling the district will try to limit direct tax increases for homeowners even as it covers a $1.75 million special education shortfall.