Amend definitions pertaining to the school funding formula.
Summary
House Bill 1003 updates and clarifies a number of statutory definitions used in South Dakota’s school funding formula. The bill revises how “fall enrollment” is calculated, including treatment of certain tuition-paying students and students in the care and custody of state agencies, and it adjusts the rules for determining the target teacher ratio factor, local need, general fund cash balance limits, and related funding inputs. It also updates the target teacher salary amount for the 2024-25 school fiscal year and continues the annual inflation-based adjustment tied to the consumer price index, capped at 3 percent.
The bill also makes several technical and policy-specific changes affecting special categories of students and revenue sources. It excludes students residing in residential treatment facilities from the target teacher ratio calculation when the district operates the education program, preserves and phases in treatment of wind energy tax revenue for school districts depending on when a wind farm first began producing power, and retains existing provisions for alternative instruction participation, English learner adjustments, sparse school district benefits, and career and technical education amounts in statewide calculations. Overall, the measure appears to be a formula-maintenance bill intended to refine funding definitions rather than overhaul the school aid system.
Impact
HB 1003 amends South Dakota Codified Laws § 13-13-10.1, which defines key terms used in the state’s school funding formula and state aid calculations. Its legal effect is to change how the Department of Education computes enrollment-based funding factors, teacher compensation inputs, local need, allowable cash balances, and certain revenue offsets, which can influence the amount of state aid and district-level funding calculations for school districts across the state. It also affects how specific student populations and revenue streams—such as students in state custody, residential treatment facility students, alternative instruction participants, and wind energy tax revenue—are counted or excluded in those formulas.
Sentiment
The voting history suggests broad support for the bill. It advanced with strong majorities in both chambers and passed the recorded votes with little opposition, including unanimous votes in the later committee and Senate floor stages. The lack of committee transcript material limits insight into detailed debate, but the vote pattern indicates the measure was generally viewed as a routine or technical school finance update rather than a controversial policy change.
Contention
The most likely points of contention involve how the bill allocates school funding among districts by changing enrollment counts and revenue treatment. Districts with students in state custody, residential treatment facilities, or alternative instruction programs may be affected by whether those students are included in funding formulas, and districts receiving wind energy tax revenue may care about the phased retention schedule. Another possible issue is the updated target teacher salary and related formula inputs, since changes to these benchmarks can shift state aid levels and district obligations. However, the recorded votes show limited visible opposition, suggesting any disagreements were modest or resolved during drafting.