Compromise on Capital Outlay fund changes awaits one more vote

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Compromise on Capital Outlay fund changes awaits one more vote

A compromise on revisions to the different capital outlay provisions is getting closer.


Just one legislative hurdle remains for Senate Bill 170, which revises certain provisions regarding school district capital outlay funds, after last week (2/25) Senators passed it on a 35-0 vote and on Monday (3/2) House Education committee members passed it 12-0. ASBSD supports the bill.


The latest version of SB 170 makes multiple changes to the Capital Outlay fund, including:

  • Amends the annual inflationary growth cap to be set at 3 percent, instead of 3 percent or inflation;
  • Implements an opt-out process for the capital outlay fund with any of the additional revenue raised through the opt-out only allowed to be used for capital outlay purposes and not general fund transferable;
  • Raise the alternative cap on capital outlay to $3,400 per student, up from $2,800 per student;
  • For calendar years 2021, 2022 and 2023, districts impacted by the $3,400 per student cap may transfer to the general fund the amount they had transferred in 2020, but in 2024 will be subject to the 45 percent rule;
  • Beginning with taxes payable in 2021, districts unable to raise $1,400 or less per student can levy up to an amount that would allow them to reach the $1,400 per student levy, but cannot exceed $3 per thousand dollars of valuation.

SB 170 is a compromise between Gov. Kristi Noem’s office and ASBSDSASD and the other educational groups.


“The capital outlay issue has been top on their (school boards’) agenda,” ASBSD Executive Director Wade Pogany told House Education committee members. “Schools need this. It puts (schools) in good position.”


There were no opponents to SB 170, which now moves to the House floor for review and debate, and, if passed, would go to Gov. Noem for review and signature.


SB 170 is the final bill among the initial three that aimed to adjust capital outlay provisions as House Bill 1198, which provides an excess levy for the capital outlay fund, was tabled on a 59-6 vote on the House floor, last week (2/27).


Initially, House Bill 1198 called for the full repeal of the capital outlay provisions passed in 2016, but during its bill hearing (2/24) in the House Education committee it was amended to implement a process for school boards to pass resolution to impose an excess levy on their C/O fund with the resolution identifying the total amount, number of years and levy amounts on the three property tax classes.


The amended version of HB 1198 passed the House Education committee on an 8-6 vote, but its run ultimate came to an end with the approved tabling motion done on the House floor.


For updates on SB 170 and other bills from the 2020 legislative session, check the ASBSD Blog and Bill Tracker page.

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