Senate Bill 126
By Jackelyn Severin
Several Education funding bills have come before the state legislature already this session. Most of those proposing to maintain education funding instead of cutting its budget have failed so far. Lawmakers have five weeks left to come up with a proposal that meets the needs of educators while still balancing the state budget. There is one education funding bill that just might be the compromise lawmakers and educators are looking for.
Todd Vik is the business manager for the Sioux Falls School District. Like many others involved in education his hope for the end of this legislative session is schools are funded according to state law which includes an increase of 3 percent or the rate of inflation, whichever is less. Vik says this year schools should get an increase in funding of around 1.6 percent. There are a few bills floating in the legislature to fund schools fully this year. Vik says some suggest taking from reserve funds while others propose tax increases.
Vik says, “That is something that legislators should look at. It shouldn’t be seen as a tax to fund education though, because really we’ve been the slowest growing component, and when I say we I mean k-12 state aid, has been the slowest growing component of state government for the last 15 years.”
Vik says its unlikely tax increases will pass the legislature this year. He says out of all the education bills going through this legislative session the best compromise he ha seen is Senate Bill 126.
SB 126, a bi-partisan measure, is sponsored by republican Mark Johnston of Sioux Falls.
Johnston says, “I tried to come up with a solution to curb the deep spending cuts for k-12 because frankly the kids that we’re educating today are the future workers of our state and they’re the future business owners of our state and future entrepreneurs of our state.”
Johnston says there is essentially three parts to his bill. The first part takes 20 million dollars from the Education Enhancement Fund to create a new fund called the Education Stabilization Fund.
Todd Vik says the Education Enhancement Fund has around 340 million dollars. It was created around 2001 with money the state received from a tobacco settlement.
Vik says, “Originally I believe most people thought that, and I can’t speak for everybody else I guess but that, that interest would fund some smaller programs, you know, three hundred and forty four million dollars, interest on that is a fairly sizeable number if you’re getting any kind of a return. And you could do some innovative education projects with it but when the budgets got tight the state essentially just rolled that money into funding the state aid formula.”
Vik says the legislature takes about 4 percent of the interest that comes from that education enhancement fund now and transfers that into the general fund.
The second part of Johnston’s bill borrows 20 million dollars from school districts over the next two years.
Johnston says, “The school districts will not receive about 83 to 85 dollars per student. In short they’re loaning the state of South Dakota 10 million dollars in fiscal year 12 and fiscal year 13 to help bridge the structural deficit gap.”
Johnston says in 2014 the state will begin to repay school districts back, with interest, from the newly created Education Stabilization Fund.
Sioux Falls Business Manager Todd Vik says although Johnston’s bill keeps the funding formula the same as last year’s levels this bill is a much better solution and a smaller reduction than Governor Daugaard’s proposed cuts of 10 percent.
“This would essentially amount to a 1.6 or 1.7 percent cut so you’re, you know in Sioux Falls, you’re looking at about 2 million dollars you have to cut from your budget versus, you know, 10 or 10 and a half million dollars,” says Vik.
The third portion of Johnston’s bill is the most contentious. For the next two years, Senate Bill 126 blocks schools from opting out to receive more local funding from property tax payers.
Brian Aust is with Associated School Boards of South Dakota. He says schools need to have this option.
Aust says, “We’ve got to remember that, I think, that we’re coming off two years of you know about 20 million dollars of cuts to k-12 and certainly there’s been some per student funding freezes so finances are extremely tight and many schools in the state were probably, were looking at opt outs and exploring opt outs and you know having shut those down for two years just isn’t going to be a solution for a lot of districts.”
Aust says Associated School Boards does support SB 126 but he hopes lawmakers will reconsider prohibiting opt outs.
For Johnston this is an essential part of the measure. He says land owners are saying their property taxes are high enough and they do not want to see them go up even more.
Johnston says his bill is part of a bigger conversation that state government needs to have about making itself more efficient and responsive to South Dakota taxpayers. He says he wanted a solution that would address the structural deficit but also wouldn’t jeopardize the future of education in South Dakota.
“We’ve got to have an education system that’s preparing our kids to be the next generation to work in this great state and help us continue to thrive and grow and I really believe that Senate Bill 126 is a tool to help us continue to do that,” says Johnston.
In the end Johnston says lawmakers need to take a deeper look at the education system. He says the state needs to make meaningful changes to how education is administered and funded in the future.
Senate Bill 126 goes before the Senate Education Committee tomorrow morning. You can listen to the full audio online at sdpb.org/statehouse.
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