Governor Larry Rhoden’s proposed budget assumes the state will take in 2.4% more revenue in Fiscal Year 2027 than it is on track to take in this fiscal year. Yet Rhoden proposes using none of that additional $58.7 million to help K-12 schools meet their rising costs. He’s proposing cutting K-12 state aid to general education by $12.9 million from budgeted FY 2026 levels and scaling down this year’s state aid to our public schools by $15.5 million.
Rhoden justifies again ignoring the state law that says we should ratchet up K-12 funding each year by the lesser of inflation or 3% by pointing out that we have fewer enrolled students and fewer babies:
For K-12 education, in particular, enrollments are down across the state. And why is that? There are two main reasons. Number one, births are down 9% over the last 10 years. And even though South Dakota still has the highest birth rate in America, it’s not high enough to keep up. In the meantime, we’ve seen a 216% growth in students getting alternative education, such as homeschooling. Those families are choosing the best education option for them, and they should! Our funding formula is largely based on the number of students in public education, and when there are fewer students, this is what happens [Gov. Larry Rhoden, budget address, 2025.12.02].
Governor Rhoden says the state has increased K-12 funding 29% since 2020—the lowest increase among the five major budget areas over that period—so the public schools can deal with flat funding this year after a stingy 1.25% increase last year.
On the faintly less dim side, Governor Rhoden has not yet proposed any increase to the stealth vouchers program that diverts $5 million in public tax dollars to private schools. The Legislature increased funding for that program by 75% in 2022 and by 42% this year.
Rhoden says schools and everyone else should view his “limited budget” as an “opportunity“… which sounds like something Rhoden would say to his boys when they had a whooping coming. But nobody sounds eager to seize this “opportunity”:
Rapid City Democratic Rep. Nicole Uhre-Balk said inflation will eat away at flat funding if legislators approve Rhoden’s plan.
“Not increasing is a cut,” she said.
…Rep. Mellissa Heermann, R-Brookings, worries efforts to “drag ourselves up” in teacher pay rankings will be erased without more state support to education. South Dakota moved up the national ranks from 50th in teacher pay in 2021 to 46th this year.
“It’s been difficult for us to even maintain the gains we’ve had,” said Heermann, who served on the Brookings School Board for six years. “All other states around us are also increasing their teacher pay, so my fear is that 0% is going to move us backwards.”
…“Up until about last year, schools were doing OK keeping up with inflation. They weren’t getting ahead,” [SDEA lobbyist Sandra] Waltman said. “But when you start to receive funding that’s less than inflationary, that’s when you start to fall behind and see school districts cut positions and budgets” [Makenzie Huber, “‘Not Increasing Is a Cut’: Governor’s Flat Funding Plan for Education, Health Care Worries Advocates,” South Dakota Searchlight, 2025.12.01].
Governor Rhoden’s FY 2027 budget leaves $14 million unallocated—mad money for the Legislature to spend on other priorities. Let’s hope appropriators start with that $14M and find additional revenue (like maybe clawing back the $5 million we’re improperly diverting from insurance tax to private schools!) to help the public schools keep up with inflation.