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SD Teacher Pay Rock Bottom in Region, Even Counting Lower Taxes and Cost of Living

Governor Dennis Daugaard cheers South Dakota’s mighty ascent from 51st to 48th in the nation for average teacher pay with a declaration that we are accomplishing his goal “to make South Dakota’s teacher salaries competitive with other states, considering salaries and cost of living.” The Governor’s office notes that if we factor in taxes and cost of living, we actually rank 29th nationally.

You know what’s coming.

If we revisit the tax burden figures WalletHub offered a couple weeks ago and subtract each state’s state and local tax burden from each state’s average teacher salary (and throw in this estimate from D.C. to cover all 51 data points), South Dakota’s straight after-tax teacher pay ranks 45th in the nation. If we then divide each after-tax average by each state’s cost of living, as calculated by C2ER, South Dakota’s after-tax COL-adjusted average teacher pay ranks 47th in the nation.

How do things look in the region?

2017 salary st/loc tax burden 2017 sal after tax 2017 COL COL adjust
Iowa $55,647 9.32% $50,461 91.3 $55,269
Minnesota $57,346 10.37% $51,399 99.7 $51,554
Montana $51,422 7.64% $47,493 100.4 $47,304
Nebraska $52,338 9.17% $47,539 92.9 $51,172
North Dakota $52,968 8.69% $48,365 99.7 $48,511
South Dakota $46,979 7.22% $43,587 99.5 $43,806
Wyoming $58,187 8.03% $53,515 95.6 $55,978

On straight dollars, we’re still $4,443 behind our closest competitor, Montana, and more than $10K behind Minnesota and Wyoming.

After tax, we’re still nearly $4,000 behind Montana and further behind everyone else in the neighborhood.

Apply cost of living—which by C2ER’s measure isn’t really that different in South Dakota from the national average—and the average South Dakota teacher’s purchasing power is 7.8% less than in Montana, 17.7% less than in Minnesota, and 26.2% less than Iowa’s.

No matter which of these measures you pick, South Dakota teacher pay remains in the bottom ten in the nation and dead last in the region.

Update 12:04 CDT: The Governor’s press release cites the 2016 Tax Foundation tax burden data and the April 2017 Bureau of Economic Analysis “regional price parity” data that the Governor’s Office of Economic Development uses to generate its 50-state comparisons. When I run GOED’s numbers on NEA’s numbers, I find South Dakota’s post-tax purchasing power ranks 37th in the nation. The regional picture through GOED’s goggles looks like this:

GOED data 2017 salary st/loc tax burden $ 2017 sal after tax 2017 RPP RPP adjust
Iowa $55,647 $4,037 $51,610 90.3 $57,154
Minnesota $57,346 $5,185 $52,161 97.6 $53,444
Montana $51,422 $3,389 $48,033 94.2 $50,990
Nebraska $52,338 $4,197 $48,141 90.6 $53,136
North Dakota $52,968 $4,867 $48,101 91.5 $52,569
South Dakota $46,979 $3,318 $43,661 88 $49,615
Wyoming $58,187 $4,407 $53,780 96.2 $55,904

GOED’s numbers make South Dakota look better—we come within $1,375 of the next closest state, Montana—but even under those rosier numbers, South Dakota teachers’ average purchasing power remains at the bottom of the regional heap, 2.7% to 13.2% below our neighbors’.


  1. owen reitzel 2018-04-25 09:24

    I’d like to hear where the Governor got his stats from

  2. o 2018-04-25 15:34

    All these statistics certainly are interesting and raise great questions, BUT the only way the issue of salary has traction (as it did for our Governor and legislature two+ years ago) is when all this transfers into the language of student opportunity. Do these wages prevent (allow if we phrase in the positive) students of SD to have the education opportunities we value? Do these wages entice our educators to cross the borders to other states or (I believe worse) not go into education at all?

    Student opportunity framed in the criteria of high-quality instructors is the language we must look to.

  3. Cory Allen Heidelberger Post author | 2018-04-25 19:29

    O, how long would it take the effects that we would suppose—higher pay draws higher talent—to translate into measurable increases in academic achievement?

  4. P. is Me 2018-04-25 20:31

    In addition to low teacher pay, South Dakota’s teacher retirement plan is inadequate. South Dakota has a 3-year vesting period, meaning new teachers must stay 3 years to qualify for at least a minimum pension. Sadly, only 53 percent of South Dakota teachers will qualify for employer-provided retirement benefits. Teachers who leave the plan before then must forfeit contributions their school or state made on their behalf.

    In today’s world, workers are likely to have multiple jobs, and they need to be able to cobble together enough savings at each stage along the way in order to afford a secure retirement. Teachers are no exception, and they should be able to take their savings with them no matter why they elect to leave the classroom, whether for personal reasons, as a career change, or to continue teaching in a different state.

    Also, South Dakota contributes 5% towards retirement benefits, which below national average, which I believe is 11%, it’s been awhile since I looked at it so I could be a little off.

    South Dakota’s current retirement system is designed in ways that systematically disadvantage large groups of teachers and impair the ability of schools to recruit, hire, retain, and compensate high-quality teachers.

  5. o 2018-04-26 08:35

    Cory, real statistical data has been a bit soft about the effects of the wage increase in recruitment and retention. I saw interest in college students to come back to education majors that they had left; I believe (my college faculty friends can fact check me) education programs at our universities saw an up tick; I also believe there was a group of teachers who held off retirement for three years to get the most retirement bang from the 1/2 penny raises. This year will be telling – now those who put off retirement will be going out the door.

    My fear is that there is an expectation of success that must be disproportionate to the funding effort or there will be buyers’ remorse for the funding increase. As is, a lot of pro-education legislators took political beatings for being “pro-tax.”

    Our competition are not standing still either. Other states are addressing their teachers’ pay as well. Strong teacher-led movements are pulling state legislatures toward properly funding students’ education needs.

    So I guess the answer to your question was some effects should have been immediate (fewer retirements), while others will not hit until next year when the first of the four-year education majors graduate under the promise of better funded teaching positions.

  6. leslie 2018-05-22 18:01

    kristie wants to make : “prioritizing education programs that produce job-holders, not just degree-holders;”…her genius in education. sounds cheaper than paying for well educated teachers.

    “Local healthcare providers have been relentless in expanding access ” but she and Trump want to tube the ACA which healthcare providers support!!!???

    she has tribes fooled into believing she is on their side. that is a voting block Billie MUST penetrate.

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