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Rep. Novstrup Celebrates Defeat of Capital Outlay Cap/K-12 Per-Student Allocation Boost

Rep. Al Novstrup (R-3/Aberdeen) cites as his top accomplishment for the 2015 Legislature the defeat of House Bill 1207:

Rep. Justin Cronin brought HB 1207 out of concern that the capital outlay tax is the only tax without a restriction. Putting these brakes on capital outlay levies would have diverted another $72 to the per-student allocation, which would have bumped this year’s increase in K-12 support from 2% to 3.5%. HB 1207 was intended to relieve pressure on taxpayers, meaning it was a net decrease in K-12 funding, but compromise amendments induced education groups to give it tepid support. The bill nonetheless failed, with Rep. Novstrup, five other Republicans, and three other Democrats on House Taxation deferring it to the 41st day.

We can read this vote a couple ways. We can say that conservative Republican Al Novstrup stopped K-12 education from losing $9 million. We could say that Rep. Novstrup kept the schools from accessing another $9 million to increase teacher pay (remember: capital outlay pays for buildings, computers, and other physical equipment, not human resources). We could say that Rep. Novstrup hastened a property tax revolt, allowing local school districts to levy capital outlay as high as they want (although superintendents testifying against the bill said they had heard no rumbles of such rebellion).

But what if we universalize the thinking behind the defeat of HB 1207? In rejecting this bill, Rep. Novstrup seems to be saying we can trust local districts to set capital outlay tax levies at appropriate levels, without the need to go through an extra opt-out process. If we can trust local districts on capital outlay, why not trust them on all of their levies? Why not extend counties and other taxing entities the same trust? Why not remove all of Bill Janklow’s property tax caps and let local control rule? (Rep. Novstrup supported that idea in his vote for the unsuccessful House Bill 1216.)


  1. mhs 2015-03-14

    Capital outlay has plenty of caps. It’s limited to 3 mils max and any debt against the Cap outlay levy usually requires a ratio of collections over required debt payments of between 115% to 150%.

    This was a solution in search of a problem.

  2. grudznick 2015-03-14

    The elder of the brothers Novstrup does seem to know his way around budget math. I like the cut of his jib and his haircut too.

  3. caheidelberger Post author | 2015-03-14

    (Grudz, I think we’ve gone over this: Rep. Al is Sen. Dave’s dad.)

  4. Gail Swenson 2015-03-14

    Let local control rule? Let the local officials do the jobs they were elected for? I don’t know. That sounds suspiciously like democracy…….

  5. Jake Cummings 2015-03-15

    Gail, local control is great in theory, but it ignores the possible inequitable distribution of resources, which can compromise the ability of local areas to effectively meet their needs. For example, it relies on local policymakers having adequate knowledge to make informed decisions, and I think the legislature itself demonstrates that vast disparities exist within our state to exercise critical decisionmaking. Second, situational economic differences exist which influence the propensity, and/or even ability, of an area to make requisite investments in certain sectors. For instance, an area with considerable private industry growth will likely have more fiscal resources at its disposal than an economically-depressed area. Lastly, demographic factors influence local dynamics. For example, a county with high levels of retired individuals without children in school may be less prone to devote additional funding to local education.

    I can definitely appreciate the value of local control, but I just need assurance that local control results in maximal local opportunity and is not merely an excuse for inaction by the state to avoid addressing inequity. My concern is that local control will allow our “stellar” counties to separate themselves at the expense of counties that lack their advantages.

  6. Bob Newland 2015-03-15

    I nominate that haircut for the Ted Klaudt award.

  7. caheidelberger Post author | 2015-03-15

    Interesting, Jake: do I hear some Harrison Bergeron in your concern that “stellar” counties would outspend and gain an unfair advantage over poorer counties?

    The policy Rep. Novstrup discussed here, capping the capital outlay levy, doesn’t by itself seem to directly confront equitable distribution of resources. It would stop stellar districts from raising levies to meet locally supportable needs and wants, but it would not redistribute extra resources to more needy, less wealthy districts. The per-student allocation increase might have been a small step toward that redistribution, but I’m not sure the mechanics of that bill guaranteed that the total PSA increase would have come from redistributionist state aid rather than adding cost to the local effort required.

    I agree that local control is not an absolute good. Local board members are as capable of stupidity as legislators and governors. That said, I don’t want to stop a prospering school district from raising more capital outlay to provide all of their students with MacBook Airs and comfy chairs, but if those Airs and chairs provide real educational benefits, I’d like the state to look for ways to help other districts access those benefits.

  8. Jake Cummings 2015-03-15

    Cory, I have not read Harrison Bergeron yet; I will have to add that to my list. My statement was directed more toward the fact that areas like Sioux Falls have advantages ranging from a bustling economy to skilled non-profit grantwriters which serves to solidify such areas’ continued success. I do not begrudge them that success, but I think it would be a mistake to say, “Well, Sioux Falls succeeded in doing …, so we can make that work in …, the state need not intervene, locals are fully capable of dealing with this themselves.”

    I definitely am not trying to portray myself as a proponent of sanctioning the stellar so that the disadvantaged can realize some success, but I do feel that one function of government should be to minimize inequality and maximize opportunity to the greatest extent possible.

  9. Al Novstrup 2015-03-16

    Cory, How about a rewrite of the headline, “Rep. Novstrup Celebrates Defeat of Capital Outlay Cap/K-12 Per-Student Allocation Boost”

    My suggestion “Rep Novstrup Celebrates the Defeat of a $72/Student Decrease”

    Plus 9 million for education minus 18 million for education equals negative 9 million for education. The $72/student increase combined with the $144/student decrease in education funding produced a $72/student net decrease.

    Hard to spin a $72 decrease per student as a good thing for education which is why the bill died and stayed dead.

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