Governor Daugaard signed a number of bills last week that will have an impact across the State of South Dakota. At least two of these bills will also make a difference locally in the Garretson School District – not by making our need to pass the opt out less, but by reducing the necessary tax increase if it passes and by providing the district the funding to remain a viable and competitive employer in the region around Sioux Falls.
One bill, HB 1182 was the bill that will increase sales taxes in the state by 0.5 cents, with some of that money intended to increase teacher salaries and the other portion intended for property tax relief.
Another bill, SB 131 has much more detail than 1182. This is the bill that defines the formula that will be used to determine the total General Fund needs that school districts have, based on the number of students. This bill has many components, one of which was the abolition of the Pension Fund Levy ($0.30 / 1,000). The intent of the legislature was to combine the current GF levy and the Pension Fund Levy into one tax. The bill also changes the way schools will tax for the Capital Outlay Fund. Essentially, this bill will slow the growth of the CO fund to the rate of inflation, or 3%, whichever is less.
On Thursday of last week, the Legislature set the tax levies for the General Fund and the Pension fund (remember that SB 131 combined the two levies into one tax). When we calculated the tax increase for the opt out, we worked with the county auditor’s office to come up with the figures and did not take the tax relief into account. The table below shows the difference that we can expect if the community supports the opt out in the March 22 election.
The numbers in the chart above are all reported as a “dollars per thousand in taxable valuation.” Using these updated figures, we have recalculated the impact of a yes vote on the opt out. The following chart shows good news regarding the impact of this legislation and how it will affect people in our community if the opt out is approved. We will find out more in the coming weeks regarding exactly what these two bills mean for schools financially. These calculations were made based on the best data available, and we will adjust as necessary as more information is released from the SD Department of Education regarding the funding formula and tax relief. If our community chooses to support the opt out, the cost will be less than initially anticipated.