Members of the South Dakota Legislature’s Ag Land Task Force voted to support a proposed bill that would limit the growth of the capital outlay levy of a school district to 3 percent or the change in CPI-W, whichever is a greater, at their meeting on Tuesday (Nov. 18).
In addition to the cap on levy growth, the proposed bill would require districts to submit a total dollar amount needed for their capital outlay fund budget to the county equalization officer, who would then set the district’s levy. Currently, a district sets the levy amount.
The proposed legislation would allow districts the option to seek an opt-out of the capital outlay levy, similar to what’s in place for the general fund, through board action, which is subject to referral by the voters, if they wish to receive additional funds.
The proposed bill comes after months of discussion following the 2014 legislative session surrounding the growth of the capital outlay levy, which can be levied at a maximum of $3 per $1,000 of land valuation and is not, under current law, tempered by any cap.
Amid claims of complaints by tax payers, complaints not made to local school boards, the governor’s office convened a work group consisting of legislators and representatives from various education groups, including ASBSD Executive Director Wade Pogany and First Vice President Eric Stroeder, to discuss resolutions for the situation.
Only recently was a compromise between both sides discussed, but no agreement had been reached prior to the Task Force’s passing of the proposed legislation.
Pogany testified before the Task Force on Tuesday, reiterating that local school boards were not hearing the alleged complaints from tax payers and that a “very heartfelt discussion” was taking place among various education groups to reach a compromise with proponents of the levy cap.
“I can’t tell you that there is a compromise…but we will continue to negotiate,” Pogany said, also noting that the proposed legislation passed by the Task Force may send the wrong message to schools.
“There needs to be something in this (proposed bill) that addresses (the tax revenue loss),” Pogany said.
The Task Force did not discuss the loss of revenue school districts would incur from a cap on the capital outlay levy or how much would be lost, but some Task Force members did say there needs to be some funding included in a finalized proposal for school districts.
Task Force Chair Senator Larry Rhoden said there would be “no reason school districts would support” the proposed bill and dollars needed to be there for schools to make it a “little more palatable” for them.
Sen. Rhoden added that the Task Force needed to pass a proposal to “guarantee” that talks continued because Tuesday’s meeting was the final time the group would meet before session began in January.
“This is a vehicle bill,” Sen. Billie Sutton said of the proposal. “It is nowhere near completion.”
Sen. Sutton, who voted to support the proposal, said there needed to be an influx of state dollars in the proposal.
Negotiations are expected to continue in the weeks leading up to and during legislative session. The subject will be discussed by ASBSD member districts at the upcoming Delegate Assembly.
For updates on the capital outlay discussion at Delegate Assembly and in the time leading up to session, check the ASBSD Blog.