Limits to K-12 Cuts Gain Steam (SD)
February 11, 2011
Lawmakers are coalescing around alternative ideas that would limit cuts to K-12 education in the next budget, and Gov. Dennis Daugaard signaled Thursday that he is willing to consider at least two of those ideas.
Lawmakers have proposed allowing schools to tap their capital outlay budgets to help with general fund expenditures. A second proposal would freeze property taxes at their current level rather than allowing them to decrease in line with reduced state support.
Daugaard said he supports the idea of giving schools more flexibility to access capital outlay funds. And while he would prefer that local taxpayers deal with property taxes on a district-by-district basis, he said he isn’t opposing a bill that would freeze them at current levels on a statewide level.
The new developments came on the same day that Daugaard met with Sioux Falls School District Superintendent Pam Homan. The two talked for a little more than an hour, and both sides described it as "productive."
"It was a good, cordial meeting," said Tony Venhuizen, Daugaard’s director of policy and communications. "They agreed to disagree on some things. Dr. Homan offered some ideas that the governor agreed to consider."
Homan arrived with a broad funding plan that incorporates some past and present ideas for education funding as well as some new ones. She said her plan meets the governor’s goal of eliminating a $127 million deficit. However, it would cut per-student funding by 4.5 percent instead of the 10 percent Daugaard proposed.
"The governor will review this plan," Homan said. "I certainly didn’t expect that he would say ‘yea’ or ‘nay’ today."
The plan incorporates a bill proposed by Sen. Larry Rhoden, R-Union Center, that would freeze statewide property taxes. And it relies on the $26.3 million Education Jobs Fund appropriated by the federal government last August. The state used that money to supplant state aid, and state officials plan to spend the savings next year on one-time costs outside of education.
Homan wants that money to help pay for the per-student allocation next year instead. Daugaard’s administration has opposed that idea, saying it spends one-time money on ongoing costs, creating a $26.3 million hole in the following year’s budget.
In addition, Homan wants the state to make low-interest, five-year loans available to schools from the Education Enhancement Trust Fund, which was created through a settlement with major tobacco manufacturers.
Looking ahead, her plan would start in fiscal year 2013 and would tie the state’s increase or decrease in per-student allocations to growth in state revenues – an idea championed in past legislative sessions by former Sen. Dave Knudson, R-Sioux Falls.
Another idea coming from lawmakers would establish an "education stabilization fund." Schools would divert $83 per student in 2012 and 2013, and the state would contribute $20 million from the $368 million Education Enhancement Trust Fund for a total of $40 million. But Daugaard said Thursday that he would veto the bill if it reaches his desk.
The reason, he said, is that drawing down the trust fund’s principal would mean less money for education from the fund’s future interest earnings. He likened it to cutting off the branches of an apple tree to keep warm during the winter.
"The next spring, you’re going to have fewer apples," he said.
Republicans in the Senate have formed three working groups to find ideas for funding on education, Medicaid and potential revenue changes, Senate Majority Leader Russ Olson of Wentworth said.
Democrats also have signaled that they’re willing to support some of the alternative ideas, including the idea that schools should be able to tap capital outlay funds. But Senate Minority Leader Jason Frerichs of Wilmot called the ideas temporary "Band-Aids."
"It doesn’t answer the question of how we are going to properly fund education and make education a priority," he said.