A plan to require schools to submit additional financial data met its demise Friday on the floor of the South Dakota House of Representatives.

Legislators voted 42-25 to dismiss SB 127, a bill that would allow the South Dakota Department of Education to conduct an annual survey on school budgets and staffing decisions. The measure was filed after dozens of schools chose not to respond to an electronic survey sent by Sen. Corey Brown, R-Gettysburg. The request asked for details on school district budgets following sweeping cuts to per-student funding.

Rep. Larry Lucas, D-Mission, told lawmakers that schools already provide significant amounts of financial data, which is available on the state education department’s website. He said schools have trust issues with legislators, especially following the state’s failure to honor the per-student funding formula, so that may explain why schools opted not to return the survey.

Rep. Patty Miller, R-McCook Lake, also spoke in opposition, arguing that schools have enough to deal with without having to respond to an annual survey. The survey may provide useful information, she said, but lawmakers didn’t need to add the requirement this year.

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Members of House Education on Friday voted to scrap a controversial plan to rate schools on financial performance, but backers of the system are likely to revive the concept later this session.

The action came during a public hearing on Senate Bill 25, a bill that was originally intended to replace outdated public school accountability laws that were enacted following the passage of the No Child Left Behind Act. ASBSD initially supported the measure, but switched to opposing the plan after members of Senate Appropriations tacked on language that will rate schools on their financial performance.

ASBSD Executive Director Wade Pogany on Friday asked lawmakers to scrap the financial component of the bill, arguing that the measure infringes upon local control. He also questioned whether the plan is attempting to mirror a program in Texas, which dictates statewide spending restrictions, including thresholds for spending on school administration.

“You have the best accountability system in place – they’re called school boards,” Pogany said, adding that existing law already requires schools to make public all expenditure information and audit results. “We don’t really understand the problem that’s trying to be solved.”

Sen. Phyllis Heineman, R-Sioux Falls, asked lawmakers to keep the language in place. She said audits and other reporting only show that schools are spending the money according to law, but there’s no measure to determine whether the money is being spent effectively. She previously said the plan would allow the state to identify and share financial best practices.

Pogany challenged that notion Friday, suggesting that school business managers already collaborate and share effective budgeting strategies.

“Business managers in this state, when they have to cut $52 million, they talk to each other,” he said.

Committee members agreed to strip the language, but several lawmakers suggested that the plan may be included in SB 127, a separate bill that requires schools to report any financial information that the South Dakota Department of Education wants to collect.

Sen. Deb Peters, R-Sioux Falls, told lawmakers that removing the language wouldn’t change the fact that appropriations committee members will get the information they want. She said the committee works hard to track state agency spending, and wants to do the same with funds sent to local schools.

After deleting the financial rating system, members of House Education passed Senate Bill 25.

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The state school board association on Thursday testified in opposition to a bill designed to overhaul the state’s public school accountability laws, arguing that a recently added provision has the potential to weaken local control.

The comments came during a public hearing on Senate Bill 25, a bill that state officials argue is necessary to replace the outdated and flawed laws enacted following the passage of No Child Left Behind. In the Senate, lawmakers added a controversial “financial accountability rating system” to the measure.

The school board association supported the legislation prior to the addition of the financial rating system, but ASBSD Executive Director Wade Pogany told lawmakers Thursday that the sudden move to broaden the accountability system has subverted the transparent process used to develop the original proposal and infringes upon the authority of local school boards.

Pogany raised questions about the purpose of the financial accountability rating system, telling lawmakers that the new provision looks similar to a Texas law that sets parameters on how school districts can spend district resources. Specifically, he aimed his arguments at components that may dictate administrative cost ratios or class size limitations.

“What you’ve just done, is that you’ve eliminated local control,” Pogany said. “That takes away all the discretion and all the work that school boards will do in the future.”

Pogany is also concerned that the new proposal doesn’t recognize the amount of financial reporting schools already do. School boards provide extensive information to the department of education and must comply with legally established accounting and auditing practices, he said.

Attorney Dick Tieszen, representing the Sioux Falls and Rapid City School Districts, also testified against the measure, arguing that the controversial component lacked input from education stakeholders and wasn’t properly vetted through a workgroup that created academic performance standards.

“If I were to suggest to you that tomorrow we should start a financial accountability system for legislators, wouldn’t you want to know why? Wouldn’t you want to know what the information is that I’m going to gather before we use it to rate you?” Tieszen asked. “I couldn’t imagine that you wouldn’t.”

During time reserved for committee questions, Education Secretary Dr. Melody Schopp defended the financial accountability rating system, saying that it will help schools identify financial best practices. She also suggested to lawmakers that the financial accountability system is a friendly amendment to Senate Bill 25.

Sen. Deb Peters, R-Harford, the amendment’s prime backer, told lawmakers that the system will help the Legislature figure out why some schools may not be able to produce the same achievement results with similar levels of education expenditures. Once the legislature has the data, the system will allow one school to “copy” another.

The committee endorsed the measure with the financial accountability rating system included.

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A massive overhaul of the state’s public school accountability laws was expanded Thursday to include a new “financial accountability rating system” that lawmakers say will help schools operate more efficiently.

Legislators added the language to Senate Bill 25, legislation that houses the framework for a new statewide accountability system. The amendment, sponsored by Sen. Deb Peters, R-Hartford, is patterned after the School Financial Integrity System of Texas, or FIRST.

In Texas, the law encourages districts to manage financial resources in a way that provides the most money possible for direct instructional purposes, and was used initially to determine whether schools were spending at least 65 percent of district expenditures as classroom expenditures. The law requires districts to submit financial information to the state education department to assign districts to one of four financial accountability ratings, superior achievement, above-standard achievement, standard achievement or substandard achievement.

The amendment doesn’t detail how schools would be held accountable for academic performance, but it does grant the South Dakota Department of Education sweeping authority to define indicators of financial management performance. The new law would also “integrate existing academic accountability and financial data” and rank the state’s public schools based on the “relative performance of school districts.”

The amendment was proposed after the committee had closed the public hearing on the measure, and lawmakers nearly adopted the amendment before taking public comment. Mitch Ritchter, an education lobbyist, had to interrupt committee action to request an opportunity to comment on the new language.

ASBSD Executive Director Wade Pogany testified against the amendment. He asked what legislators were intending to accomplish and how they would measure effectiveness.

“What do you want from us?” Pogany asked. “I think it’s fair that we answer that question.”

Sen. Jeff Haverly, R-Rapid City, said he struggles with how schools spend their money and the state needs to bring uniformity to how districts spend their money.

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After admitting that the state’s current public school accountability laws are flawed and weren’t realistic when they were established, Education Secretary Dr. Melody Schopp began a push Thursday to revamp how public school performance is measured.

Schopp’s comments came during a Senate Education Committee hearing on SB 25, a bill that establishes a broad legal framework for a new, state-specific public school accountability system. She briefed lawmakers on the components of the legislation, but focused most of her testimony on the expansive system the education department will implement through their administrative authority.

According to Schopp, the new system will move away from judging schools on a single, mandated state assessment and to a plan that includes multiple measures of school performance. She outlined five areas – student achievement, academic growth, college and career readiness, teacher performance and school climate – that will be used in a new calculation called a “School Performance Index.”

The state’s top education official told lawmakers that the proposal is an upgrade over the current system, which was implemented following the passage of No Child Left Behind. She stressed that the plan better fits the unique circumstances of the state’s K-12 schools and will give the public a better idea of how schools are working to improve.

Schopp urged lawmakers to approve the measure, arguing that the state needs the legislation to qualify for a waiver from federal No Child Left Behind accountability laws. Without action, federal laws will still apply and a larger number of state’s schools will be identified for school improvement.

ASBSD Executive Director Wade Pogany testified in support of the legislation, telling lawmakers that school boards embrace public school accountability and are willing to do the work necessary to improve student achievement. He reminded lawmakers that the new accountability model is complex and not yet clearly defined, and he cautioned lawmakers that a lot of work still needs to be done to implement the proposed system.

Pogany walked lawmakers through each of the performance indicators, listing possible implications for local school boards, including provisions that would force schools to devote limited district funds to implement the new law. He also asked lawmakers to help local school boards.

“When you pass this bill, please don’t walk away,” Pogany said. “This isn’t just a math problem, this is our kids. We need the flexibility, time and resources to make this work.”

School superintendents, and representatives from other education organizations also testified in support. The South Dakota Education Association opposed the bill.

Members of Senate Education referred the bill to Senate Appropriations on a 7-0 vote.

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Congress has failed to rewrite the nation’s public school accountability law, so the South Dakota Department of Education is taking up the task.

The framework for a new state public school accountability system is housed in SB 25, a measure introduced at the request of the state education department. In general, the bill eliminates language codified following the passage of No Child Left Behind and replaces it with a skeletal outline for a new model released last December.

The legislation is short on detail, leaving most of the specifics to the education department’s rule-making authority. Open Forum will have a more detailed explanation of the bill in the coming days.

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