South Dakota

Funding priorities for south dakota p-12 and higher education

Like many small, rural states, South Dakota has struggled with economic downturn that has negatively impacted education funding. The Blue Ribbon Legislation of 2016 created a new K-12 school funding formula, raised teacher salary, and placed strict accountability requirements on the way schools expend funds.¹ The laws mandated that schools receive an annual increase equal to the consumer price increase or 3%, whichever is greater.² In FY2019, revenue collections were ahead of projections, ending in a $19 million surplus, which many view as a positive sign of economic recovery.³

At the university level, tuition increased for 2018-19. In the last decade, tuition has increased 48% for in-state tuition and 66% for out-of-state.⁴ The lack of state support equated to resident students in 30 hours of coursework owing $8,870 for in-state tuition.⁵

Changes to funding formula for p-12 and/or higher education

Two issues plaguing South Dakota were addressed by the Blue Ribbon Legislation of 2016: low teacher salaries and increasing student-teacher ratios. A target teacher salary ($48,000) and a new funding formula were created by the legislation. Student-teacher ratios based on levels of district enrollment determine funding.

For 2019, the target teacher salary, adjusted for Consumer Price Index (CPI) was $49,131.96.⁶ The State Department of Education takes the total need calculation applies the amount against local funding to determine state aid. Because it was possible districts could lose funding in the transition, the legislation created an "opt-out" option for local school boards.

Salary increases were also provided for higher education faculty. However, the state only paid half the cost of the raises.⁷ The other half was paid by the universities, and the cost was passed to students through tuition and fee hikes.

Pressing state issues affecting p-12 and/or higher education funding

More than 44% of school districts were using the opt-out option.⁸ Teachers have seen an increase in salary, but overall funding has stagnated. While teachers have increased from 51^st in the nation to 48^th and increased in the region from last to the median, schools continue to struggle with funding increases below the CPI.⁹

Tuition at state universities is now higher than many out of state colleges increasing competition and flattening enrollment figures.¹⁰ State regents introduced a program called "Dakota's Promise," asking lawmakers for $3.5 million in funding, but was voted down due to slow tax revenues and a tight budget.¹¹

Forces diverting funds from traditional public school districts and higher education

High teacher turnover and teacher shortages continue to plague South Dakota schools with poor salaries cited as the primary reason. Recovery from the Great Recession has been slow for small, rural states such as South Dakota. Even with aggressive legislation, lagging budgets impede progress. Higher regents are concerned increases in tuition will eventually drive students to seek lower costs out-of-state. It is estimated $15.7 million is needed to bring tuition down to the regional average. ¹²