Legislative committee members approved a bill that could potentially subtract up to $400,000 from other revenue supplied to school districts on Thursday (1/28).

 

On an 11-4 vote, members of the House Taxation committee passed House Bill 1097, which would exempt certain taxes and fees from the gross receipts tax on telecommunications services.

 

South Dakota State Economist Jim Terwilliger said HB 1097 would decrease other revenue by approximately $300,000 to $400,000 dollars.

 

“We’re using some these dollars to pay for teachers and students that are in schools today,” ASBSD Executive Director Wade Pogany testified in opposition of the bill.

 

Pogany and three other education association representatives that testified in opposition of the bill were referred to as a “parade of horribles” by Rep. Lance Russell, who also stated his understanding of HB 1097 was that it wouldn’t have consequences for schools.

 

“The way I understand it is this will have no effect on a school district’s bottom line,” Rep. Russell said.

 

Terwilliger noted the subtraction of the other revenue dollars would affect a school district’s funding.

 

“If that (other revenue fund) is slightly lower by $400,000,” Terwilliger testified, “you’d have $400,000 less in funding for those school districts.”

 

Russell cited the portion of Gov. Dennis Daugaard’s K-12 funding proposal that would equalize six other revenue sources, including gross receipts tax, across all districts as a reason the passage of HB 1097 would not be harmful because the reduction would result in more state money.

 

The proposed equalization of other revenue will be based on a per-student state average and will take place over a five-year, step down process and during that span a district’s excess other revenue would be counted towards their local effort.

 

The subtraction of up to $400,000 in other revenue as a result of HB 1097 would obligate a district’s local tax payers to fund more local effort.

 

The bill now advances to the House floor for review. For updates, check out the ASBSD Blog, Twitter feed and Bill Tracker page.