Superintendent and business manager warn levy reform will bring budget uncertainty despite targeted wins

The Rapid City Area Schools superintendent and business manager told the board on March 7 that the recent state legislative session delivered both immediate benefits and long-term fiscal questions for the district.

Superintendent Dr. Thompson highlighted HB1082, which will reimburse schools for reduced-price lunches and ensure those meals do not become bad debt. “It will provide free lunches for families who meet the federal requirements for reduced price meals,” Dr. Thompson said, adding that the district will need to notify families and coordinate implementation with state guidance.

But several bills that change levy structure and state aid prompted caution. The district’s business manager (referred to in the record as Mr. Sassy) said HB1051 revises levies and state-aid formulas, and SB245 creates a Homeowner Property Tax Reduction Fund funded by a portion of sales tax intended to backfill lost owner-occupied levy revenue. “One of the things that always concerns me about bills like this is the bill does not specify how the revenue will be backfilled,” Mr. Sassy said, and he warned that the mechanics are not yet clear for years beyond 2027–28.

Mr. Sassy said legislative fiscal analysts estimate the change will reduce property-tax revenue statewide by about $56,000,000 in the first year the new levy structure applies and that the new sales-tax fund would be expected to replace that revenue. He also noted the legislature raised the target teacher-salary component of the state aid formula, which the district models as a 1.4% boost that increases the target teacher salary to roughly $63,700.

Board members asked timing and implementation questions. The business manager said levy and sales-tax mechanics, the timing of the first affected tax statements and how the Department of Revenue will administer the new fund remain unresolved and will require ongoing work between state and local entities.

Other bills the superintendent summarized include SB8 (allowing stock epinephrine in nasal form), HB1181 (adding coaches to mandatory reporters), HB1313 (instruction on prenatal growth and development with required state guidance), SB46 (require proposed agendas to include all items) and SB138 (recount timing and procedures for school boards). Several items will require district-level policy or implementation steps once state agencies issue further guidance.

The board did not vote on legislative responses at this meeting, but members thanked the district’s legislative committee and lobbyist for advocacy work they said helped secure some positive outcomes.

The district’s finance team will continue modeling impacts and will bring budget recommendations to future meetings.