PEKIN, IOWA -- Iowa schools face additional challenges in budgeting after three bills passed in the state legislature.

Our Fact Finder Team visited Pekin High School and talked with Superintendent John Dodson about the new bills.

Two of the bills delay setting the 2011-2012 education budget and spending authority for schools.

By waiting, lawmakers hope the economy will rebound and expand the budget.

The Pekin schools, like many others, face a shortfall in this year's budget.

Pekin Superintendent, John Dotson, said funding is down about half-a-million dollars because of lower enrollment and the ten percent statewide budget cut.

According Dotson, the two basic cost saving measures are to close a building or reduce staff.  He hopes to avoid the latter, but the short budget window means he must plan for the worst.

“If they are going to delay letting us know how much their going to give education each year from a budgetary standpoint, the only choice we’re going to have if we can't close down buildings is were going to have to issue out termination papers to staff members and at a later time we'll probably call them back in,” Dotson said.

He said doing this would hurt moral and they might lose quality teacher to other schools.

The other bill restricts schools from raising local property taxes if their cash reserve is strong.

Dotson already faces budget shortfalls and prefers to keep his cash reserve for emergencies such as a boiler going down. However, the current economic conditions require reserves to be used for general funds.

“Every school district in Iowa has dipped into their cash reserves quite substantially,” Dotson said. “If we continue to eat down those funds we are not going to have any rainy day funds leftover in case we do have an emergency come up during the school year.”

This bill provides no state funding and pushes the responsibility of funding schools to a local level.

Dotson says that taxes are a necessity to maintain quality education.

“It's easy for the state to say were not going to raise our taxes but then we have to keep our operating costs going to keep quality education programs going and the only way were going to be able to do that is continuing to raise property taxes,” Dotson said.

He believes this bill will lead to a larger tax hike in the future.