CFO: State-aid formula, enrollment decline likely to shrink district's general fund despite legislative increases

Chief Financial Officer Sasse told the Rapid City Area School District 51-4 board on Jan. 20 that a mix of falling enrollment and rising local property valuations could shrink the district's state aid next year, leaving the district with less general fund revenue despite a legislatively proposed increase in the state's target teacher salary.

Sasse said the district's current general fund budget for fiscal year 2025 is about $106,300,000 and that state aid accounted for roughly $37,800,000, or about 35% of that fund. He warned that under current assumptions the district would receive about $35,600,000 in state aid next year'a roughly $2.2 million year-over-year decrease.

"When you hear the message that state aid is increasing by x, that is not accurate," Sasse said. "The target teacher salary is what is increasing." He described how the formula's four major variables'enrollment, target teacher salary, an overhead rate and local effort (property tax-related revenues)'interact and can produce outcomes that seem counterintuitive to the public.

Why it matters

Sasse…