Rapid City Area Schools board warns state-aid pause and levy changes will squeeze capital and general-fund resources
Summary
Board members and staff told the Rapid City Area Schools Board of Education that although district property valuation rose about 5.6% for taxes payable 2026, legislative reductions to classification levies and capital outlay formula limits mean general-fund local effort will be nearly flat while capital outlay growth is constrained by a growth-plus-3% rule and a $3-per-$1,000 ceiling.
Board members and administrators said rising property values don’t automatically translate into more money for district operations or facilities at a Dec. board meeting.
Board presenter Ward, speaking as part of a scheduled budget series, said the district’s total assessed valuation increased about 5.62% for taxes payable 2026, pushing the district’s total valuation to just over $14.45 billion. But he said legislative reductions to classification levies — particularly owner-occupied and commercial classifications — and formula limits mean local general-fund effort will be nearly unchanged from last year.
"Local effort to the general fund is really gonna be flat year over year, a very minimal increase of about $80,000," Ward said. "Property valuations are increasing, though, at a slower rate this year." He noted the special-education local-effort estimate is expected to grow more directly with valuation, by roughly 3.77%.
The board heard that capital outlay funding now follows a "general rule" formula that constrains revenue growth to "growth plus 3%" (with "growth" defined as new construction in the district) while still being limited by an overarching $3 per $1,000 valuation cap. Ward reported the district’s max capital outlay request for pay '26 at $32.6 million, a 4.7% increase over pay '25, driven by a growth factor of 1.7%.
Ward and several board members emphasized a widening gap between total valuation and new growth — a gap that reduces how much capital outlay revenue the district can access even as taxpayers may see rising property valuations. "As that gap grows, the gap between those two numbers grows," Ward said, describing a difference that has reached roughly $10.7 million in recent analysis.
Board members asked how levies were set and who benefits from the dampening mechanisms. Ward said the legislature, working with the Department of Revenue, recommends levy adjustments and that state-level policy choices — not local officials — are primarily responsible for the changes. Several board members described frustration that taxpayers see higher assessed values while the district’s available revenue doesn't rise in proportion.
Several members urged legislative advocacy. "If it indeed he does propose 0% increase that we maybe could rally some legislators to propose a bill to do the 3% or whatever is larger," one member said. Ward and others said they will prepare illustrative materials for legislators showing the effects of a 0% state-aid change combined with flat local effort.
What’s next: The board scheduled a deeper state-aid and enrollment briefing for the next meeting and discussed assigning board members to legislative outreach and negotiation teams.
Votes and formal actions related to budget issues were not recorded on the meeting minutes beyond the routine approvals on the consent agenda.
