Below is a letter Dan Swartos, superintendent/principal of Big Stone City School District, sent to parents, staff and school board members. He does a good job of explaining Senate Bill 133, which basically finds money by shuffling payment dates.
The slight-of-hand concept doesn't invoke much faith in our lawmakers and their ability to fix a broken system, but in a pinch it may be our only hope to stave off a crisis in education. We are left wondering, though, what happens next year given that we'll be stuck with the same governor and group of legislators.
(Also, here are a couple of updates on SB 133 from South Dakota Public Broadcasting and the Mitchell Daily Republic.)
Parents, Staff, and School Board:
You may start hearing quite a bit about Senate Bill 133. It is being sponsored by Cooper Garnos from Lyman County and is the result of an idea put forth by Shayne Mcintosh, Superintendent from Parkston. It is a complicated bill to understand, but here is my take on what it would mean:
The short answer is that it is an accounting trick. Currently, schools receive their state aid payment from the state of South Dakota on the 30th of each month. This bill would move the payment to schools to the 1st of each month. If the bill passes, schools would receive their final payment for this fiscal year (FY2011) on June 30th, 2011. The next payment would be on August 1st, 2011. Essentially, the state would skip the July payment payment during fiscal year 2012 (7/1/12-6/30/12). The state would have 11 state aid payments to schools in Fiscal year 2012 rather than 12 payments, saving the state approximately $27 million. Schools would receive their 12th payment on July 1, 2012, or the start of Fiscal year 2013. Allowing the state to do this would assist the governor in addressing the structural deficit and hopefully help to solve the funding problem for future years.
The second part of this bill would be to freeze local property tax levels by making adjustments to the Cutler/Gabriel Act, which keeps state and local contributions proportional at 54% state/46% local.
By freezing local levys, the cut to schools would be reduced from 10% to 5.6%. Skipping one payment on the state's end would allow the state to keep funding levels at or slightly below current levels and reduce the cuts even further. In the end, schools would see only a 1% or 2% cut, the structural deficit would be addressed, and the governor would be allowed to keep his promise of not raising taxes. In Big Stone City, this is the difference between $60,000 in cuts and $6,000 in cuts. In Milbank it would be $45,000 rather than $450,000. Early portions of this bill included stipulations that would give schools the $26 million in federal education jobs money that was accepted and kept by the state last year, but this is not in the current form of the bill.
SB 133 has passed through Senate Ed and through the Senate floor. The next step will be the House floor, where it will either be voted on and sent to the Governor or sent to House education first.