The Democratic caucus in Pierre has filed its teacher-pay tax plan. Senate Bill 151 exempts food from sales tax, then raises the rest of the sales and use tax from four to five percent.
SB 151 reads much like SB 161, which is a bill Democrats have introduced three years in a row (see the 2014 and 2015 versions) to zero the food tax and simply offset the losses with by adding 0.35 percentage points to the remaining sales and use tax. SB 151 directs that the additional revenue of its additional 0.65 percentage points toward state aid to K-12 education. Check out the final two sections:
Section 20. That subdivision (4) of § 13-13-10.1 be amended to read:
(4) “Per student allocation,” for school fiscal year 20162017 is $4,876.76$5,813.32. Each school fiscal year thereafter, the per student allocation is the previous fiscal year’s per student allocation increased by the index factor;
Section 21. That § 13-13-72 be amended to read:
13-13-72. It is the policy of the Legislature that the appropriation for state aid to education increase on an annual basis by the percentage increase in local need on an aggregate statewide basis so that the relative proportion of local need paid by local effort and state aid shall remain constant. For school fiscal year 2013, it is the policy of the Legislature that the relative proportion of the total local need paid by state aid shall be amended by adjusting the proportion of state aid to fifty-three and eight-tenths percent of the total local need. However, the increase in the per student allocation on an annual basis that exceeds three percent shall be paid solely by the state and is not a factor in this policy [Senate Bill 151, introduced 2016.02.04].
That 19% increase in the per-student allocation is 19.2% higher than this year’s PSA and 6.4% higher than the equivalent per-student allocation provided by the Governor’s new K-12 funding formula for schools with enrollment over 600 (which would include 77% of South Dakota’s students). If I’m doing my math right, applying the Governor’s figures for benefits and overhead, SB 151’s per-student allocation would provide funding to bring the teachers up to an average salary of $51,601, beating the Governor’s target salary by $3,101 and, as Democrats have promised since the beginning of Session, putting South Dakota in the middle of the regional teacher pay pack instead of leaving us at the bottom.
The Democratic plan shows that the Governor’s Blue Ribbon K-12 teacher pay plan is unnecessarily complicated. We don’t need three bills with an overhaul of the funding formula and a bushel basket of other programs to achieve our fundamental goal: raise teacher pay. As a bonus, we can do it by mitigating the regressive effects of our tax increase by exempting food from sales tax. Go Dems!