SB 55 revises South Dakota’s school finance statutes by changing school district property tax levies and updating the formulas used to calculate state aid for general education and special education. For general education, the bill sets new maximum school district general fund levies for taxes payable in 2026 and later, including separate limits for agricultural property and owner-occupied single-family dwellings, and it continues to base those levies on valuations assessed at 85% of market value. It also updates multiple funding inputs used in the state aid formula, such as fall enrollment, target teacher ratio, target teacher salary, teacher benefits, overhead rate, local need, local effort, and cash balance calculations.
The bill also revises special education funding. It sets a new special education levy limit for taxes payable in 2026 and later, updates the definition of local effort, and establishes new per-student allocation amounts for each disability level for the 2025-26 school year, with future increases tied to the index factor. The bill retains and updates provisions governing how special education fall enrollment is calculated, how nonpublic school students are counted in certain circumstances, and how statewide special education need is computed, including set-asides for extraordinary expenses and the School for the Blind and Visually Impaired.
In practical terms, SB 55 affects school districts, taxpayers, the Department of Education, and students receiving general or special education services. It changes the property tax levy structure that helps fund district operations and special education, while also adjusting the state aid formulas that determine how much state support districts receive. The bill’s changes are designed to reset funding assumptions for the 2025-26 and 2026 tax years and to keep annual funding growth tied to inflation through the index factor.
The overall sentiment reflected in the voting history appears generally favorable, with the bill advancing through multiple stages by substantial margins. However, the recorded votes also show some opposition at each stage, suggesting that while the measure had broad support, it was not unanimous. No committee transcript is available, so specific arguments for or against the bill are not documented in the provided materials.
The main points of contention likely center on school property taxes, the size and distribution of school funding, and how the revised formulas affect local districts versus state aid. Because the bill changes both tax levies and aid calculations, debate would reasonably involve taxpayers concerned about levy levels, school districts concerned about adequacy and predictability of funding, and policymakers balancing local control with statewide equity in education finance.
SB 55 amends several sections of South Dakota law governing school district taxation and education funding, including provisions in chapters 10-12, 13-13, 13-37, and related definitions used in state aid calculations. It raises or resets statutory levy limits for general fund and special education property taxes beginning with taxes payable in 2026, updates the formulas used by the Department of Education to calculate general and special education aid, and revises indexed dollar amounts for teacher compensation and disability-based special education allocations. The bill directly affects school districts, taxpayers, and the state education funding system by changing how local effort and state aid are computed.
The bill appears to have received generally positive support, as shown by repeated do-pass-amended votes with large majorities in the Senate, House committee, and House floor. The presence of some nays at each stage indicates limited but consistent opposition, likely reflecting disagreement over tax levels or funding formulas rather than broad rejection of the bill’s purpose. No transcript is available to provide more detailed discussion sentiment.
The likely areas of contention are the school property tax levy changes and the revised state aid formulas, especially how they shift funding responsibility between local taxpayers and the state. Stakeholders may differ on whether the new levy caps are sufficient, whether the updated teacher salary and special education allocation amounts are adequate, and how enrollment and local effort are counted. School districts and education advocates would generally favor stable or increased funding, while taxpayers or fiscal conservatives may be concerned about levy impacts and the growth of education spending.