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Rural legislators express dislike for new school-funding system

PIERRE -- South Dakota's new school-funding system doesn't provide enough money to small-enrollment school systems, state legislators elected from rural areas said Monday.

PIERRE - South Dakota's new school-funding system doesn't provide enough money to small-enrollment school systems, state legislators elected from rural areas said Monday.

They said schools aren't receiving enough funding to cover one teacher per grade.

The comments came from two Democrats and two Republicans during a presentation on the new formula by Tami Darnall, finance director for the state Department of Education.

Earlier this year, the Legislature approved Gov. Dennis Daugaard's request to raise the state sales tax to 4.5 percent from 4 percent.

The money is for raising teacher pay and providing more property-tax relief.

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As part of the package, the Legislature also supported the complete rewrite of the school-funding system that had been in place for 20 years.

The new formula calculates the number of teachers that a school should have based on enrollment. The old formula used a per-student basis.

Darnall explained the new formula to the Legislature's Agricultural Land Assessment Implementation and Oversight Advisory Task Force.

The panel's main purpose has been guiding the conversion of agricultural property values from a sales-based system to a productivity-based approach.

Property tax levies on farm and ranch ground are the main source of local funding for many rural school districts.

Rural schools saw about 300 of their teaching positions go unrecognized in the new funding system, according to Sen. Jim Peterson, D-Revillo.

The 300 are approximately two teachers per school district, but the 300 tended to be concentrated among smaller-enrollment schools with the smallest faculties.

"I think work has to be one on this," Peterson told Darnall.

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Only one of the schools in his legislative district receives enough funding to cover all of its teachers, according to Peterson, who described his reaction as "quite upset" when he saw the disparities.

"It comes down to what's in statute and there's opportunities to look at statutes every year," Darnall replied.

Rep. Julie Bartling, D-Gregory, said many school districts lost funding because the new formula uses one year of enrollment rather than two years. Darnall said 72 districts were using the two-year approach.

Rep.-elect Larry Rhoden said his impression was small-enrollment districts were treated more unfavorably than larger-enrollment districts. Rhoden, R-Union Center, is a long-time legislator who is returning in 2017 after a one-term break.

"Those numbers weren't arbitrary," Darnell answered.

She said the Blue Ribbon Task Force assembled by the governor put a lot of thought into it.

More money was provided for distance-education courses that Northern State University provides for high schools. School districts also could seek grants for sharing services of teachers, Darnall said.

Darnall said the small school adjustment was $17 million under the old formula. Now about $17 million is going to small schools, she said.

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But Peterson said many small schools lost under the new formula when all funds are rolled into the measure of local effort. Many of those funds previously weren't counted in the state aid calculation.

Rep. Lee Qualm, R-Platte, said school districts in his area were hurt by the changes. He said the Legislature should revisit the formula in the 2017 session.

"I think it's a huge issue how all this is shaking out right now," Qualm said.

Bartling agreed with him. Bartling said the enrollment methodology "has really had a negative impact."

Darnall said she wouldn't know specifics until schools file their 2016 enrollment data in November.

Bartling called for the Legislature "to remedy the issue" in the 2017 session.

School districts were allowed to stay under the old formula and see their funding remain at the previous level or move to the new formula and accept the changes. Darnall said Harding County, Hoven and White Lake opted to stay under the old formula.

Darnall noted the option was a one-time opportunity and each of the three districts can decide each year whether to convert to the new formula.

Bartling asked whether all of the other districts have lost their chance. Darnall nodded in agreement.

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