Impact Aid system to undergo changes

• John Thune

John Thune
• Tim Johnson

Tim Johnson
• Rep. Kristi Noem

Rep. Kristi Noem

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Newly passed legislation will help schools in South Dakota receive federal funding more quickly.

Public school districts that include parcels of federal, Indian or military land receive Impact Aid payments in lieu of property taxes, and schools also receive Impact Aid for serving federally connected students such as the children of tribal members. Schools have complained that the payments don’t arrive in a timely manner.

Sen. Tim Johnson, D-S.D., and Sen. John Thune, R-S.D., wrote legislative provisions to simplify payment calculations, with the goal of making the auditing process easier and getting payments to schools sooner. Rep. Kristi Noem , R-S.D., served on a conference committee that reconciled House and Senate versions of the legislation and worked to ensure the Impact Aid provisions remained in the final version.

“School districts need certainty from the federal government about what to budget for annual Impact Aid revenues,” Thune said in a news release. “I am pleased that Congress has acted to include our amendment to accelerate Impact Aid payments and look forward to the president signing this bill into law.”

According to past information supplied by Noem, 40 schools in South Dakota receive Impact Aid.

Wagner Community School is surrounded by Indian tribal land on the Yankton Sioux Reservation. Superintendent Susan Smit said her school typically receives its payments by the end of the school year, but is supposed to receive payment near the start of the school year in September.

“We got a payment last year at the end of the year, which was about a year after the fact,” she said. “What the delegation said to Washington is, ‘You need to pay what you owe and do it in a timely manner.’ ”

Lyman School District in Lyman County is still waiting for some Impact Aid money that was supposed to arrive as long ago as 2010. Superintendent Doug Eppard said the school has received funding for students from the Lower Brule Indian Reservation on time, but only portions of reimbursement for the Fort Pierre National Grasslands has come in. The grasslands lie in the northwest corner of the county.

“This portion of [impact aid] doesn’t impact our budget hugely. We don’t get a lot of money from it,” he said. “But every little bit helps.”

Lyman receives between $3,500 and $5,000 every year for the grasslands, he said.

By finally receiving that money on time, Eppard said it’ll make the budgeting process easier and will take the pressure off other programs. Plus, the district and county assessor will have less paperwork.

Chamberlain School District Superintendent Debbie Johnson said Impact Aid is a big supplement to her district’s general fund each year.

“We’ve always had late payments,” she said. “The payments always seem like back payments, really.”

Chamberlain has not received its payment for loss of tax revenue from tribal lands, but has received its payments on time for serving children of the Crow Creek Indian Reservation.

According to the South Dakota congressional delegation, the amendment sponsored by Johnson and Thune replaces a subjective “highest and best” formula, which attempts to determine the value of federal property based on the value of adjacent non-federal property. The formula bred an inefficient payment process, the senators said, and was subject to local interpretation by assessors. The legislation establishes a simpler formula that seeks to remove subjectivity from the process.

Additionally, a provision was included to ensure current districts receive a comparably similar payment to the amount they received under the previous formula. The legislation will prevent the need for the U.S. Department of Education to conduct regular audits of a school district’s annual Impact Aid application. The congressional delegation said these audits have resulted in delayed payments to every eligible school district.

The legislation also clarifies how children who have been temporarily relocated off federal military property should be counted during the duration of a base housing renovation, repair, modernization, or demolition project.

Finally, the legislation includes the stand-alone Murray-Thune “Impact Aid Timely Repayment Act of 2011” (S. 595), which will require the U.S. Department of Education to make final payments to Impact Aid schools within two years of the funds being appropriated, rather than the current six years.

Tags: impact aid, news, updates, schools, funding, budget