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CFO and superintendent warn legislature's property-tax and voucher bills could reshuffle school funding
Summary
District financial leaders briefed the Rapid City Area School Board on multiple state bills that could alter school funding sources, including voucher proposals and measures to shift property-tax revenue to sales tax or cap valuation increases.
Rapid City Area Schools officials told the school board Feb. 4 they are watching multiple bills at the South Dakota Legislature that could materially affect district funding, including vouchers and proposals to shift property-tax revenue to sales tax or cap year-over-year valuation increases.
Chief Financial Officer Mr. Sasse summarized the bills most likely to affect district finances. He said two voucher/education savings-account bills (HB 1009 and HB 1020) were defeated in committee at the time of his report but could be revived through a committee "smoke-out." He also said HB 1089 (a change in free-and-reduced lunch eligibility parameters) passed out of House Education with a "do not pass" committee recommendation, which sends the measure to the full House for further action.
Sasse singled out SB 55, the regular state aid bill, which the finance team reads as increasing the target teacher compensation by 1.25%. He and board members said the figure is below the statutory minimum of 3% in current law and likely insufficient to cover district inflation and cost pressures; the district will press for a higher figure. Several property-tax-related bills were also discussed: HB 1019 and SB 121 would reduce certain levies and increase sales tax to backfill the change, but the administration warned that shifting stable property-tax revenue to a more volatile sales-tax base could produce large funding swings. SB 101 would impose a tax-credit mechanism that caps year-over-year property valuation increases at 3% and could constrain district revenue growth for capital projects and bonding.
Why it matters: The identified bills affect the district's general fund and special education levies, long-term capital capacity (bonds and opt-outs) and personnel compensation. District officials said many of the bills contain unanswered technical questions about how the state would translate the changes into the school-aid formula and urged the board to take positions on key items.
Acting Superintendent Dr. Corey Strasser told the board the district is prepared to monitor bills closely and indicated the administration will testify as needed. Board members said they will rely on the district's lobbyists and administrators to provide technical testimony and to recommend official board positions on bills that could change revenue sources or program obligations.
Board members flagged HB 1177 during public comments as a bill of concern regarding staff impacts and asked the administration to evaluate it; the board did not adopt a bill-by-bill position during the meeting beyond the legislative packet it voted to approve earlier in the agenda.
