Governor Submits Four Bills to Enact Blue Ribbon Tax Hike and Teacher Pay Plan

Habemus bill! Rather, we have a package of four bills from Governor Dennis Daugaard finally putting in legislative language his iteration of his Blue Ribbon K-12 panel’s plan‘ to raise teacher pay.

The following bills would enact various portions of the Blue Ribbon plan:

  1. House Bill 1182 raises the revenue. Sixteen sections bump the sales/use/gross receipts taxes from 4% to 4.5%. Section 17 sends $40 million of the $107.4 million expected from that half-penny hike to property tax relief. HB 1182 does not require that the new revenue be spent on education. Section 18 declares an emergency and enacts this tax provision on June 1, 2016—one month before it would come into effect under normal procedure—meaning that if it passes, South Dakotans cannot refer it.
  2. Senate Bill 131 revamps the school funding formula. It replaces the current per-student allocation with the new per-teacher allocation based on recommended student-teacher ratios ranging from 12.5 to 1 for school districts with 200 students or fewer to 15.0 to 1 for school districts with 600 students or more. Section 4 defines the new budget reserve caps—40% for small schools, 30% for in-between schools, 25% for big schools. Section 23 allows exemptions to the reserve caps; Section 24 enforces the caps. Update 15:35 CST: Section 26 requires that schools spend at least 90% of the increased revenue provided under SB 131 in FY2017 to “increase instructional salaries and benefits for certified instructional staff.” What happens in FY2018?
  3. Senate Bill 132 repeals some consolidation provisions and amends the workforce education fund to direct money to the Department of Education instead of to school districts. Wait—that Department of Education?*
  4. Senate Bill 133 adds the gravy to the Blue Ribbon panel’s meat and potatoes: teacher mentoring, teacher certification reciprocity for out-of-state teachers, more support for distance education, and assistance and incentives for schools to share services and employees.

The Governor’s plan is thus four bills. The revenue comes from HB 1182, insulated from referendum. The actual education policy comes from three separate bills, with SB 131 the central, indispensable piece.

Read, read again, and start counting noses!

Update 20:02 CST: That Sioux Falls paper reports that only three of these bills—HB 1182, SB 131, and SB 133—are part of the Blue Ribbon plan. A source tells me that SB 132 is tucked in between 131 and 133 simply as clean-up language to the statutes being addressed in the teacher pay plan.

25 Responses to Governor Submits Four Bills to Enact Blue Ribbon Tax Hike and Teacher Pay Plan

  1. My friend Mr. C is already complaining against these bills on that confusing new RCJ website. He may get the law bills killed yet.

  2. Ah thus the power of the Governor’s Deputy Attorneys General ect finally moving a bullypulpit. We shall see

  3. Roger Cornelius

    I’m not trying to get these bills killed, far from it, I support doing what is necessary to raise teacher payer.

    What you did report about my comment is republicans complain about tax and spend liberals, while they raise taxes because of their incompetence over the past 20 years by ignoring this growing crisis on teacher pay.

  4. Roger Cornelius

    “HB1182 does not require that the new revenue be spent on education”.

    Something is stinky and it isn’t week old dead fish.

  5. This is historic.

    Now the question is, “how substantial does an objection need to be to derail this proposal?” I do not see another opportunity to provide opportunity for students through investing in teachers.

    From the BRTF listening sessions and current polling, the clear majority of SD voters want this for their schools, their students and their teachers. We are long past the point of denying the problem and must face up to solutions. Our remaining efforts have to be to encourage legislators to act in accordance with those supported, best interests. More than “counting noses” we will need to help guide legislators to a path that is new to many of them, and in turn, will support them for their actions to remedy a decades-long erosion of crucial education infrastructure.

  6. Roger: “Something is stinky and it isn’t week old dead fish.”

    I disagree. Looking at the budget as a single entity means that revenue (all of it) comes in and expenses (all of them) go out. I applaud the acknowledgment that to spend more funds on eduction, revenues are increased to cover that.

  7. Maybe it is the fish, Roger! HB 1182 doesn’t say how to spend the money, but as a friend pointed out (and as I have edited above in the original post), Section 26 of SB 131 requires that 90% of the revenue increase provided by the new funding formula be used to “increase instructional salaries and benefits for certified instructional staff.” As the Blue Ribboneers said in their final report, it’s a package, not a menu—we’ve got to pass both bills to make magic happen.

    I do find it interesting that Sb 131 Section 26 only sets that 90%-on-teacher-pay mandate for the coming budget year, FY2017, rather than imposing some mechanism that would assure ongoing commitment to teacher pay. I guess to some extent, setting the requirement one year sets the bar for future years; schools would be unlikely to raise teacher pay by this huge amount, then yank it right back down the next year.

  8. Watch the fine print about student-teacher ratios. Some school districts play games by placing certified teachers in administrative roles and calling them “teachers on special assignment”.

    Tying state aid to teacher numbers incentivizes school districts to increase the number of teachers. Allowing some of those teachers to serve as administrators defeats the goal of smaller class sizes and attendant better student outcomes.

  9. So with that language Cory, this bill can be used to fund universities, co-ops, secretary of education, etc. The language is very vague and could be manipulated into paying for trainers who are certified in their field and instruct new employees on how to operate the elevator at the capitol.

    Too open ended for my liking here.

  10. Douglas Wiken

    If the money is used to raise all teacher salaries the same percentage in a local school, it won’t do anything to get new teachers into the system. The starter pay needs to be higher. We don’t get even a $40,000 state average with all the $22,000 or so starting pay salaries. Schools also pay coaching bonuses so the least important or least competent teachers get the only bonuses.

    Not a single dime should go to schools until more of the $420 million reserves plus the other $200 million not in general funds or capital assets accounts are spent on teacher salaries.

    Schools are screwed up from top to bottom. Simply dumping money in with no strings will just make things worse.

    And then outside the K-12 system is the regental system which compels all students to pay athletic fees no matter what their position on jocks is so that a U coach can get $225,000 per year. This is an obscenely upside-down set of priorities that adds thousands to many student debts without a single benefit to them.

  11. owen reitzel

    I think any proposal is going to be tough to pass.
    Here is the story on the Dist. 20 Cracker Barrel. Read Rep. Klumbs comments.
    It’s truly amazing how little Klum cares about education.

  12. Mr. C, raise taxes then or raise taxes now, it’s still raising taxes. I think if you and I want good teachers to get more money it shouldn’t matter if a Republican proposed to raise the taxes needed to do it. I, for one, don’t really understand all these confusing laws but I trust they will make things better. Mr. H will analyze all these bills and pick the ones that help the teachers the most and ignore the fatcat administrators, we can only hope. When do the legislatures vote?

  13. Update 20:02 CST (also added to original post above): That Sioux Falls paper reports that only three of these bills—HB 1182, SB 131, and SB 133—are part of the Blue Ribbon plan. A source tells me that SB 132 is tucked in between 131 and 133 simply as clean-up language to the statutes being addressed in the teacher pay plan.

  14. Jason Sebern


    Coaching bonuses? Where does that happen? My fellow educator/coaches make about $5 an hour doing our part-time job. Thanks.


  15. Mr. Sebern, I think all government employees get big bonuses to hide behind the laws. Coaches and teachers and prison officers all get bonuses. Now I am not saying it is wrong, but this could really skew the math for the teacher raises that we want so good teachers get good raises and great teachers get really great raises. I’m just sayin…

  16. Keep your sources peeled, Mr. H. Just in case there are 4 or 5 more pieces of this legislaturation that rolls out in the next couple of days. There might be. Maybe it will involve some more of that cleaning up that needs to happen. Do not trust the legislatures until they are done.

  17. Michael, I’m not sure the teacher-student ratio incentivizes expanding staff or including teachers performing administrative duties. Keep in mind that at no point does the proposed formula actually count teachers. The schools don’t say, “Hey, we’ve got 100 teachers!” and get $81,960.15 for each one. The schools still submit their student head count, K-12 kids attending on the last Friday of September or the average fall enrollment for the last two years, whichever is higher. Then we divide fall enrollment by the target student-teacher ratio and multiply by benefits and overhead ratios and by the target salary.

    I’ll do a separate post on this math, but for now, the formula is still student-based. A school won’t get more money by hiring more teachers. The only way to get more money is to enroll more kids.

  18. In the article Owen links, Rep. Klumb apparently views paying teachers as a mere wealth transfer to one special-interest group. Rep. Klumb is apparently unable to view paying teachers as an investment in necessary services.

  19. Madman, on open-endedness, sure, HB 1182 by itself increases the sales tax and puts a net $67.4 million more in the general fund. Those specific dollars could flow anywhere in state government.

    SB 131 creates funding mandates that will draw that money to K-12 education. They need to pass together to make happen what we’re after. And I would think that no one would vote aye on the tax increase until they are assured that the teacher pay increase for which it is intended is advancing as well. It will be interesting to see these two proposals cross chambers and to watch the pages running back and forth between chambers and legislators checking Twitter to see how the bill in the opposite chamber is faring before they vote.

  20. Cory don’t you find it a bit odd that one is in the house and the other is in the senate when they need to be together to be effective.

  21. It’s about time!

  22. Madman, I did wonder about that. I will accept the idea that the sales tax increase and the funding formula overhaul had to be separate, because they are two very different topics… although that constitutional requirement didn’t stop Rep. Lance Russell from putting his video lottery revenue change and the teacher funding plan in the same bill.

    I am puzzled as to the separate-chamber trick. Does the South Dakota Legislature require that funding measures originate in the House? No, I see a number of Senate bills in the hopper raising fees and making appropriations. I’m stumped. Is there good reason for that separation?

  23. Actually, Madman, it just hit me: the Governor divided the plan into separate bills to (1) stave off Americans for Prosperity of other conservatives who might refer this plan to a vote and (2) make passage easier. The only part that would provoke a serious referendum push is the sales tax increase. Daugaard put that in HB 1182 and inserted that emergency clause, not because we really need to get that tax revenue one whole month earlier than under normal enactment but because that emergency clause bars referring the bill to a public vote if it passes. The only fight with that bill will be getting the two thirds vote necessary to raise taxes.

    Separating the tax increase also means that the other component bills won’t need to get a two-thirds vote. SB 131, 132, and 133 can pass with simple majority votes. Daugaard can get the Senate to push those measures through first (and maybe there are fewer crazies in the Senate?), then turn to the House and say, “See? Steam train a’comin’. People want the funding formula. They want the teacher pay raises. Don’t stand in the way of progress by blocking the sales tax increase.” That won’t win every vote, but the pressure might win a couple.

  24. Read HB1182 in its entirety. There is no education funding increase in the bill. The bill offsets property tax for the same amount and still does not require the monies to go towards education.

    I just read the email from the SDNEA asking teachers and administrators to show up in Pierre asking for members to support this joke.

  25. True, HB 1182 by itself does not send the money to education. That’s why we have to view it in context with SB 131, which depends on that additional revenue. And that’s why, if both of these bills pass, we have to elect legislators who are committed to continuing to devote that money to K-12 education.

    Of course, the Democrats’ plan doesn’t have this problem. The Democrats’ plan puts the tax increase and the funding requirement all in one bill. That doesn’t mean subsequent legislatures couldn’t change that spending, but it at least means that legislators know exactly what they are voting for now all in one bill.