Gov proposes 5 percent funding increase, tax cut and scholarship program

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Gov proposes 5 percent funding increase, tax cut and scholarship program

It’s a proposed 5 percent increase in state aid for public schools.


On Tuesday (12/6), Gov. Kristi Noem shared her proposed budget for Fiscal Year 2024 with legislators and the public.


“This year I am recommending a 5 percent increase,” Gov. Noem said during the address in reference to state aid.


The proposed 5 percent increase would put $24 million in new money into public schools for the 2023-24, which is a decrease from this year’s state aid bump that put nearly $43 million in new funding into the formula.



“It’s a starting figure in a long budgeting process,” ASBSD Executive Director Wade Pogany said. “The legislature, and specifically the Joint Appropriations committee, will review the proposed budget, revenue projections and other proposals between now and March.”


“Between now and then, we’ll advocate for every available for public schools because you need dollars to pay teachers, keep up with inflation costs and keep providing an excellent education.”


Gov. Noem said her office estimates inflation will be at 2.4 percent in FY24, which is a far cry from its current point of 7.7 percent and its 2022 high point of 9.1 percent. The current high inflation is squeezing school budgets thus requiring additional dollars to keep pace.


Those additional dollars are available with Gov. Noem noting in her address the state has nearly $423 million in reserves and revenue collections through October exceeding projections adopted during the 2022 session by more than $76 million.


“We expect that there will be $310 million in ongoing revenue…available in Fiscal Year 2024,” Gov. Noem said.



At least $100 million of that revenue could end up being used “by eliminating” the grocery tax that was proposed by Gov. Noem during the budget address. The Governor’s proposal could compete with a legislative proposal to reduce owner-occupied property tax by $100,000 of a home’s full and true value with either potentially costing the state around 9-figures in ongoing revenue.


In addition to proposed tax cuts needing to be on public schools’ radar, board members and administrators will want to keep an eye on the Governor’s proposed Stronger Families Scholarship, which a recommended $15 million would be put towards providing “options for children in foster care to achieve success in their education.”



“We’re unsure of the details surrounding the proposed scholarship’s aim as it relates to education, but with discussions around possible voucher or other public funds for private education programs having taken place in the past year, school leaders will need to stay informed about it,” Pogany said.


For updates on state aid and legislative session, check the ASBSD Blog.

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