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Noem Ignoring State Law Requiring Inflationary Increase in Teacher Target Salary

In proposing zero increase in the target teacher salary that determines K-12 funding, Governor Kristi Noem is ignoring state law.

The Governor is proposing $8.9 million more for our public schools, but $7.9 million is for special ed and $1.0 million is for expected enrollment increases. Bob Mercer thus concludes that Noem isn’t breaking the law:

To understand how conservative the budget plan Governor Kristi Noem outlined Tuesday was, start with this: State law says the Legislature is supposed to increase state aid to South Dakota public school districts each year by the lesser of 3 percent or the rate of inflation.

The Republican governor didn’t ask the predominately Republican body of lawmakers to ignore the law. She instead asked them to spend the expected additional money in other ways.

…For schools the bottom line, she said, was she couldn’t recommend lawmakers give more state aid when state government starts a new budget July 1.

School districts would however see under her plan about $7.9 million more in additional special education aid and about $1 million more to help pay for about 1,000 more students expected statewide, according to Wade Pogany, executive director for Associated School Boards of South Dakota [Bob Mercer, “Governor Wants SD Lawmakers to Tap Reserve Fund amid Tight Ongoing Revenue,” KELO-TV, 2019.12.03].

But Governor Noem’s budget does break the law. SDCL 13-13-10.1 says the “index factor,” for state aid to K-12 education, must be either 3% or the inflation rate, whichever is less. The projected inflation rate in Noem’s budget in 2.0%. The $8.9 million increase Noem proposes to cover growing special ed needs and enrollment is a 2.09% increase over the state aid budgeted in FY2020. But SDCL 13-13-10.1 says that index factor must be applied not to special ed or enrollment but to the target teacher salary, the basis of the entire K-12 funding formula since the great Daugaard/Blue Ribbon reform of 2016. Noem’s budget proposes no increase in the target teacher salary; Noem’s budget thus does not comply with the law.

Wade Pogany appears to recognize that schools need to get up and fight:

“We understand and empathize with the constraints the stagnant revenue collections have placed on Gov. Noem’s budget and are appreciative of her investment in special education for the upcoming year,” Pogany said afterward in a post on the ASBSD website. “Our charge is to ensure our K-12 public schools receive the inflationary increase that is required by state law” [Mercer, 2019.12.03].

Schools, don’t wimp out on this. You have every right to go to Pierre and ask the Governor Noem and the Legislature at least follow the law. You fought hard and compromised hard in 2016 to win this formula: make Governor Noem stick to the deal.

12 Comments

  1. Bill Kennedy 2019-12-04

    Nothing to see here folks, just the Governor ignoring the law, and our good old boys in Pierre will do the same. Kristi’s daughter went from $44,000 to $57,000 in less than a year. Life is good for a select few. Wonder if the predator program will show up again in 2020? And maybe some more “We’re on meth” adds will be in the future. It’s just money, what the hell! Like I said, nothing to see here folks, just keep moving along.

  2. o 2019-12-04

    I suppose this goes to showing what is and is not a priority. Not even a law can create a mindset to value something.

  3. Debbo 2019-12-04

    As Democrats have said for several decades, budgets are moral documents. I guess this means that Klueless Kristi and the SDGOP are Immoral.

  4. Donald Pay 2019-12-04

    Nah. Mercer should know better than to think he can get away with excusing this. This stuff gets into the weeds of school finance, but Mercer ought to know how the education funding formula works, and should have caught his error on this.

    There are different ways to fund special education that are separate and distinct from the general education funding. Special education does not go through the general education route.

    This link from the LRC explains special education funding:

    https://sdlegislature.gov/docs/interim/2018/documents/DECF06132018-C.pdf
    What is critical to understand is that the general education funding formula

    This is and always has been separate from general education funding. These are two separate pots of money that are handled in different ways.

    Funding of general education is done differently. The inflationary rate is part of the revenue control portion of the funding formula. When the formula came into existence, the state promise to fund a base amount of total district general fund need plus any adjustment for inflation over that year. When applied at the district level, it would constitute a revenue cap, beyond which a district could not spend on general education. They could exceed that cap by opting out. The general education formula It is somewhat complicated, and it has been rejiggered from time to time, going from a per student basis to I believe a faked up teacher to student ratio, but it still has many of the same aspects as it did when the funding formula changed in 1995.

    Now the important point here is that the state promised that inflation rate increase every year in exchange for limiting revenue. Districts could not levy more than a certain amount as determined by that inflation rate. Thus, primary purpose of the formula is a property tax limitation, not education funding.

    In my opinion, the Noem approach is breaking the foundation upon which the state funding formula works. She will either break the law and the formula, or she will have to have the legislature change the statutes that enact a formula to comport with her shift of money out of general education into special education.

    What she is doing is pitting special ed kids against their brothers and sisters in general education. And, I think, she is going to war against public education, especially public education in small towns. Rural education is going under, especially if this is allowed to go more than a year or two.

    If I’m wrong on any of this, I would like to be educated on where I’m wrong.

  5. Kal Lis 2019-12-05

    Mr. will more than likely be proven correct about this assertion, “She will either break the law and the formula, or she will have to have the legislature change the statutes that enact a formula to comport with her shift of money out of general education into special education.”

  6. Cory Allen Heidelberger Post author | 2019-12-05

    We passed the sales tax to raise teacher pay. If the extra half-penny is being used to pay for anything else, Noem and the Legislature are violating the promise made to the teachers and the entire state.

  7. Bob Mercer 2019-12-06

    Cory, I hesitate about getting into this, but you are 100 percent wrong that I concluded the governor isn’t breaking the law.

    I carefully wrote that she didn’t ask lawmakers to ignore the law, she recommended they spend the money in other ways.

    One of two things must happen when the legislative session opens January 14.

    She or a legislator on her behalf must ask the Legislature to repeal or change the law. Or the legislators need to follow the law and find the money she didn’t recommend.

  8. Cory Allen Heidelberger Post author | 2019-12-06

    Good morning, Bob!

    If the Legislature approves and the Governor signs the education budget she has proposed, they will be ignoring state law… as they have on past occasions when they have ignored the index factor. I’ll need to look, but I believe we have passed past K-12 appropriations below the index factor without changing the governing statute requiring the lesser of inflation or 3% as the index factor.

  9. Donald Pay 2019-12-06

    Cory, you are probably right that the index factor has been ignored in the past. I haven’t followed this as closely since moving away from SD. I think Bob is correct in thinking Noem had better try to change the index factor statutes, but that has other ramifications. It is a welching on the deal made in the mid-1990s. Districts are not going to be happy, not that they were happy about the school funding formula anyway. It could certainly be litigated if state law is being violated. My question would be whether breaking state law regarding the index factor negates the opt out requirement. If it doesn’t, should it? I would say yes. Why shouldn’t the districts be able increase their levies beyond the limit to make up for the loss of the index factor? That would be a way to save rural schools, and prevent a lot of cuts in other schools.

    I think Noem has wandered into a mine field. She’s trying to pit special education against general education in hopes that parents and teachers will be divided. I think they will absolutely not fall for this divide and conquer tactic. Why shouldn’t Noem’s kids and her husband be let go from taxpayer funded jobs and that money go to education?

  10. Susan Wismer 2019-12-06

    Every year we (SD Legislature-+ Pierre) mess around with the code section (change the law) that defines the index factor and target teacher salary to make it be what we can spare for the current year. The code reference is 13-13-10.1, and the bill in the 2019 session was SB 179. There are no qualms whatsoever about whether or not what we’re doing is “keeping our promise” to K-12. I’ll go into politician mode here:

    If Governor Noem really understood the economics of South Dakota, if she took her role as steward of our state government seriously, she would be advocating for revenue to replace the $30 million of internet access sales tax that she voted to take away from the state budget, (as a Congresswoman) rather than gloating about a tax cut. Putting those dollars to work investing in our kids and assuring public safety at the level of basic service and efficiency that our state does is a much more efficient investment than a $6.00 a month (or whatever it is) reduction in your monthly internet bill.

    To ignore the continuing failures of our “well-run state” that “lives within its means” and the misery and costs to our future that they inflict upon our K-12 & public college students, deaf kids, highway workers, nursing homes, disabled citizens, and your small town hospital that is struggling to stay open is callous, uninformed, and an irresponsible position for a leader to take.

  11. Donald Pay 2019-12-06

    Susan informs us that the index factor is adjusted every year. That’s true, but that was supposed to be to reflect the rate of inflation which changes every year. It should not be adjusted below the rate of inflation in order to shift of money from the formula to another place in the budget. That was the deal made in the mid-1990s. The inflation factor and the opt out were why the districts were willing to go along with the change in formula funding despite their concerns. I’m wondering how that affects the amount districts can raise now. Are they allowed to raise money beyond the cap without an opt out in the same percentage that they lose from the state as a result of the Legislature “adjusting” the index factor?

    When the Legislature made adjustments to the formula a few years ago, they should have done a better job.

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