The last other revenue adjustment bill of session was ousted in committee.

 

On a 4-2 vote, Senate Taxation committee members defeated Senate Bill 168, which freezes the other revenue step-down process at 60 percent counted as local effort. Previously, Senate Bill 111 was passed by the committee, but defeated on the Senate floor.

 

SB 168 called for the freeze of the other revenue step down plan, which was introduced in 2016 as part of the package that amended the state aid funding formula and provided $67 million in new money to increase teacher pay, at 60 percent, thus leaving local school districts to keep 40 percent of other revenue for local effort.

 

The six other revenue sources being collected by school districts – gross receipts tax on utilities, local revenue in lieu of taxes, county apportionment of revenue from traffic fines, county revenue in lieu of taxes, wind farm tax and bank franchise tax – are being equalized between the 149 public school districts in a five-year step down process at a rate of 20 percent each year.

 

This is the third year of the process.

 

Sen. Kyle Scheonfish, the bill’s prime sponsor, said the current system has created “some big winners” and “some big losers” and “government should not” make policy that creates such a system.

 

S.D. Bureau of Finance and Management Chief Budget Analyst Derek Johnson said the current system was “about school funding fairness” and the bill would “begin to unravel a very important part of” of the funding formula.

 

ASBSD was monitoring the bill.

 

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