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February05

No increase for pension levy

Members of the House Taxation committee voted to kill a bill that would have allowed school districts to raise their pension levy by $.05.

 

School districts currently can levy $.30 per $1,000 of valuation for their pension levy and House Bill 1115, which was defeated on a 10-5 vote, would have raised the maximum levy to $.35 per $1,000.

 

HB 1115’s sponsor, Rep. Jim Bolin, said school districts are “finding it difficult to meet their obligation” matching teacher pensions at the current levy levels following SDRS’s raise of contribution levels from five to six percent.

 

Rep. Bolin said the state was “rapidly reaching a breaking point” as a high volume of teachers are closing in on retirement eligibility. A study released by SASD in December cited more than a thousand school district employees with a teaching certificate were at retirement age in 2014.

 

“The pool of our (teachers) that are nearing retirement is increasing,” ASBSD Executive Director Wade Pogany testified in support of the bill. “We want to benefit those teachers as best we can.”

 

Jim Terwilliger of the S.D. Bureau of Finance and Management testified in opposition of the bill citing the inequities it creates among schools and also said the $.05 increase would increase property taxes “paid by our citizens.”

 

Opponents of the bill, both on the committee and in testimony, cited the burden of a property tax increase as their hesitation in supporting HB 1115.

 

Terwilliger did go on to note that districts can make local decisions to use opt-outs and raise local property taxes to address pension issues, if needed.

 

SASD Executive Director Rob Monson along with other proponents of the bill cited a current practice of school districts to use general fund dollars to supplement pension costs. Rep. Mark Willadsen said businesses utilize the practice of supplementing from fund to fund. School districts, unlike businesses, are dependent on public dollars for funding.

 

Rep. Julie Bartling pointed out schools now have to supplement funds with dollars that should be dedicated to other costs.

 

“(Schools are) robbing Peter to pay Paul,” Rep. Bartling said.

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