Between the Lines

As I write this, South Dakotans are waiting for the Gov. Dennis Daugaard to give more specifics on his plans for the state budget.

And there�s a chance that he might just make former Gov. Rounds look like a sissy when it comes to slashing spending.

It is expected that Daugaard will announce plans calling for reductions of 10 percent or more in state government�s general fund budget.

Daugaard has made clear he opposes any tax increases, and one-time sources of money should be used only for one-time purposes. He plans to hold meetings in cities across South Dakota in the days after his speech to explain his recommendations.

The Vermillion School Board has already received a warning shot regarding this, contained in a memo it received Jan. 7 from Wayne Lueders, executive director of the Associated School Boards of South Dakota.

In the memo, he noted �rumors are spreading about the new administration�s desire to address the structural deficit and balance the budget during the upcoming legislative session. The discussion now appears to focus on a possible 10 percent cut rather than the original 5 percent.�

The �five percent� Lueders referred to refers to one of Gov. Rounds� last recommendations before leaving office. In December, Rounds proposed a state budget which included a 5 percent cut from the current per-student allocation of $4,804.60.

Lueders calls the 5 percent cut �devastating for some school districts.� A 10 percent cut would be devastating, he said, to all school districts.

What�s somewhat disturbing about all of this is that Gov. Rounds and state lawmakers, and, it appears, Gov. Daugaard, too, either have no problem with simply ignoring state law, or at least tinkering with it whenever they feel like it.

The rule of thumb that has been followed for years now, because it�s written in state code, states that school district�s state aid per pupil will increase each year by the rate of inflation up to a maximum of 3 percent.

Evidently, that law was either changed last year, or it�s simply being ignored. I�m embarrassed to admit that my research so far has yet to reveal just exactly what happened to allow school districts to receive no increase in state aid this school year. If the law were still in place, one would assume, there wouldn�t be talk about going backwards in state aid in the future, with possible cuts of 5 to 10 percent.

No matter the status of the law (it sure appears to be bound, gagged and locked in a trunk in some musty closet of the state Capitol) we are entering some very dangerous territory when it comes to school funding.

Granted, the law, in the scheme of things, didn�t guarantee all that much funding to school districts year after year. For the last 10 years, school districts have received less than 3 percent in increases to the per-student allocation of state aid, mainly because inflation has stayed low.

Now that the law appears to have been tossed aside, the funding of public schools, more than ever, appears to the subject of whatever capricious notion may be present in the capitol building�s hallways this year.

We aren�t denying that South Dakota faces some severe budgetary problems. Gov. Daugaard will need to make $140 million to $170 million of cuts and adjustments to bring the budget back into true balance without tax increases or using state reserve funds.

But a 10 percent cut in state aid to schools, besides being devastating to local districts, also will require South Dakota lawmakers to turn their backs on recent history.

Our collective memory shouldn�t be so short. Remember back in the mid-1990s, when there was a lot of local turmoil about the Vermillion School District�s budget? That marked a time when great changes were going on, specifically with how the state funded schools.

Property taxes were the issue a few years earlier, and Gov. William Janklow promised to reduce local property taxes by 30 percent.

So, after he was elected, he began slashing. He and the Legislature were able to come up with only 20 percent of tax relief initially. They put state government on a path of conservative spending that gradually delivered the full 30 percent.

Janklow�s promise likely saved South Dakota from an even greater fiscal disaster. In 1994, South Dakota voters nearly passed an anti-tax initiated measure that would have slashed property taxes for school districts and local governments by approximately 60 percent.

The changes made during 1995-96 included providing a financial protection for school districts and property owners alike in the form of a property tax reduction fund. The fund was designed as a reserve to hold excess state-tax revenue as a cushion in case state government couldn�t fully cover its commitment to schools.

Janklow and the legislators back in the mid-1990s didn�t want schools to face funding cuts, or property owners to face unexpected tax increases, if state government got into financial trouble.

It appears the state�s philosophy regarding school funding could change drastically this year. And what�s particularly sad about that is not just the funding cuts to education that likely are headed our way.

We thought we had a deal. Yes, we welcomed the cuts in local property taxes about 15 years ago. But we also knew that, if enough people cared enough about local education, we could opt out of the property tax freeze and spend a bit more on our children�s education.

So we did, also keeping in mind that we had that property tax reduction fund to lean on in times like this.

Now it appears that the funding we�ve been counting on � that we�ve been promised over the years, even though it has been a pittance � won�t be there. It will be used to help balance the state budget. Meaning deep cuts to local school districts.

South Dakotans fed up with smoking in bars and restaurants finally, with a bit of trouble, were able to vote on the issue, superceding the governor and state Legislature.

Perhaps it�s time to consider the referendum process once again and call for a public vote on restoring the 3 percent or rate of inflation benchmark we�ve had in place for some time regarding state aid funding. That package could include an amendment that would prohibit state lawmakers from raiding reserve funds set aside to help school districts.

And, let�s face it. This measure likely would require some sort of revenue source to restore the funds that have been already been spent on things other than education. It could mean a temporary increase in the state sales tax.

It might not be the most pleasant thing for the citizenry to tolerate.

But what�s certainly intolerable is the financial devastation facing our school districts if something isn�t done.

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