PIERRE -- Further details emerged Thursday about the governor's plan to shift nearly half of the costs of three state education programs to property owners.
The plan would cost property owners in the neighborhood of $5 million per year once the changes took full effect.
Reporters originally were told the changes would shift $2.6 million of the costs.
That technically is true for the first year. But the total financial effect would be approximately double, at more than $5 million, for the second year and each year after.
That's because school tax collections and state payments to schools occur at different times.
ADVERTISEMENT
Property taxes are collected on a calendar year basis. State government sends state aid to schools using a July 1 to June 30 fiscal year.
State aid is a combination of revenue raised within a school district by the general-education tax levy on property and money that state government provides as a supplement.
The Legislature sets a per-student allocation of state aid each year. The amount of the allocation is split so that, on a statewide basis, property taxes provide 46.2 percent and state government 53.8 percent.
The Legislature then sets the statewide general-education levies to generate the necessary amount on a statewide basis. There are three levies for agricultural property, owner-occupied homes and other properties such as businesses, apartments and second homes.
Each school district keeps the revenue raised within its boundaries from the general-education levies. State government then provides whatever additional amount is needed to reach the per-student allocation for that school district.
That means school districts receive varying amounts of state aid per student depending upon their revenues from the general-education levies. Some districts don't receive any state aid under this formula.
The governor's plan calls for applying the same ratio of 46.2 percent support from local property taxes to three programs currently 100 percent funded by state government.
They are school technology, academic assessments and bonus payments to sparsely populated rural school districts.
ADVERTISEMENT
They currently cost state government $11.2 million. For the first year, the governor's proposed change would reduce state government's costs for the three programs by $2.6 million.
The governor in turn wants to redirect the $2.6 million into the state aid formula so there would be a 2 percent increase in the per-student allocation.
In the second year, the change would reduce state government's costs for the three special programs by approximately $5.2 million, based on current amounts.
The governor had planned to recommend the minimum 1.5 percent CPI-based inflation increase for state aid but would be able to offer 2 percent under the funding switch, according to officials for his administration.
The Legislature would need to adjust the general-education levies to account for the local 46.2 percent match on the additional one-half percent of state aid.
The additional details that came out Thursday clarified the incomplete information that was provided to reporters Wednesday.
The per-student allocation for the current school year is estimated at $4,781.
It was $4,805 prior to the cuts made in 2011 by the governor and the Legislature.
ADVERTISEMENT
The governor's new 2 percent proposal would raise the amount to $4,877.
