By Rep. Ray Ring
We’re now over halfway through the 2013 legislative session.
This week I faced a difficult decision with House Bill 1239. School districts can currently levy up to 30 cents per thousand dollars of taxable property value for the Pension Fund, which is dedicated to paying pensions or contributing to pension funds. HB 1239 would have raised the maximum levy to 40 cents per thousand dollars value and allowed districts to divert pension fund money to pay for health insurance.
In a similar change, a few years ago, the districts were allowed to use the Capital Outlay Fund for current expenses such as utilities and transportation. Before that, Capital Outlay Funds were limited to buying, improving, or remodeling “real property, plant, or equipment” (SDCL 13-16-6).
These short-term fixes have potentially serious long-term consequences. When the state provides too little money at the same time that it limits school districts’ own revenues, the schools have little choice. They resort to short-term solutions like using the pension and capital outlay funds for purposes for which they were not intended. Delaying pension contributions or capital spending (such as roof repairs) shifts more of the burden onto future taxpayers.
State government does not adequately support education. Adjusted for inflation, total state aid to local schools was lower in 2011-2012 than in 1999-2000. During the same twelve years, inflation-adjusted property taxes rose by 17 percent. Insufficient state support forces local districts to use the only other source available to them.
Besides being short-sighted, these changes are unfair. Pension and capital outlay funds are not included in state equalization aid calculations, so property-rich districts (with higher assessed values per pupil) can raise more revenue with the same property tax rate than can property-poor districts. Opt-outs provide the same advantage to property-rich districts.
I opposed HB 1239 the first time we voted on it, because it is bad policy. It lost narrowly, but was brought back for reconsideration the next day, with the cap lowered back to 30 cents per thousand. In the meantime, I heard from several constituents how desperately they need even the small amount of additional funds it would be provide. I changed my vote, as did many other legislators, and the bill passed. I accepted a short-term, short-sighted answer to an intense need for funds.
It’s time for state policy makers to acknowledge that state government needs more resources. Instead of raiding another cookie jar (or small restricted fund) while we wait for the goose that lays the golden egg (sorry about the mixed metaphor), we need to act to solve our long-term funding problems. The longer we wait, the more difficult they will be to resolve – and people suffer in the meantime.
Please don’t forget the cracker barrel in Vermillion City Hall, March 2, 10 a.m. You can contact me directly at Rep.Ring@state.sd.us or (605) 675-9379.