How was the South Dakota Public Education System Established, and how are District Budgets Finalized?
Sioux Falls Home Owners Pay $1,770.20 in Property Taxes to Fund the Sioux Falls Public School District
The South Dakota Public School System was first established upon the State of South Dakota being first established in the year 1889. Upon adopting the South Dakota Constitution, it was agreed upon, and codified as part of Article 22, Section 4 of that constitution that:
• That provision shall be made for the establishment and maintenance of systems of public schools, which shall be open to all the children of this state, and free from sectarian control.
With that codified act, the People of South Dakota agreed to establish its public school system, one of which was to be free and clear of all "Sectarian Control". Meaning, the State's role in the matter would be the people's right to fund, manage, and control its public school system without any one faction of people burdening them with undue legislation, rules, or specific types of activities.
Sectarianism is a political or cultural conflict between two groups, often related to the form of government they live under. Prejudice, discrimination, or hatred can arise in these conflicts, depending on the political status quo and if one group holds more power within the government. Often, not all members of these groups are engaged in the conflict. But as tensions rise, political solutions require the participation of more people from either side within the country or polity where the conflict is happening. Common examples of these divisions are denominations of a religion, ethnic identity, class, or region for citizens of a state and factions of a political movement.
A uniform system of free public schools in order to provide for the stability of a republican form of government depending on the morality and intelligence of the people, it shall be the duty of the Legislature to establish and maintain a general and uniform system of public schools wherein tuition shall be without charge, and equally open to all; and to adopt all suitable means to secure to the people the advantages and opportunities of education.
So from day one, while the people have the right to manage and control their own public schools, the Legislature was tasked with ensuring the whole people that the proper maintenance, a uniform set of rules would, and shall govern the system, and the the fact that public education should be free for all to use, providing the citizens the opportunity to educate their children in subjects such as math, science, reading, writing, history, and literature
From here, we must also hereby understand, that the Federal Government upon sectioning off lands between 1841 and 1904 - reserved specific lands to be used for public education, while most lands were claimed by Americans, and other lands became public lands held by the State in 1889, there were many sections of land reserved by the Federal Government with the intention of placing public schools throughout the territory.
In 1889, when we became the State of South Dakota, we the people had agreed to create the Perpetual Trust Fund in order to deposit monies for the sole reason for the maintenance of public education.
All proceeds of the sale of public lands that have heretofore been or may hereafter be given by the United States for the use of public schools in the state; all such per centum as may be granted by the United States on the sales of public lands; the proceeds of all property that shall fall to the state by escheat; the proceeds of all gifts or donations to the state for public schools or not otherwise appropriated by the terms of the gift; and all property otherwise acquired for public schools, shall be and remain a perpetual fund for the maintenance of public schools in the state. It shall be deemed a trust fund held by the state. The principal shall never be diverted by legislative enactment for any other purpose, and may be increased; but, if any loss occurs through any unconstitutional act, the state shall make the loss good through a special appropriation. Article 8, Section 2
So we have established this public trust fund to be held by the people of South Dakota, to be managed as part of our State Treasury, to appropriate federal and state funds for the maintenance of public education.
Getting more into how the school districts shall be funded, we have to begin to dive into Article 13 of the state constitution itself - in its own words:
School district funds are all monies received by the school district or schools within said district or as a result of an activity carried on by the said school. Said funds come from the following sources: taxes, income from school property; school district borrowing through bonds or promissory notes; funds received from federal, state, or other political subdivisions; funds received from individuals or organizations through paid admission, payments for materials or services, gifts, or trusts; funds received from fines and penalties; and any other funds received by the school district or schools from any other source.
So you can see, our school districts receive monies from several sources of revenues, and depending on the size of the district, the total residents within the district itself, the activities, and policies established by the governing bodies of the districts, a South Dakota School District can in fact create its own independent budget totally separate from the State government itself.
While as a State, we have placed the Legislature in charge of apportioning our more direct property taxes, whether by means of sales taxes or property taxes assessed to lands ceded to the state by the people, meaning whereas the citizens temporarily surrendered those land patents to the state in order to allow the state to temporarily take ownership of the land, giving the the state to assess property tax to your land. Keep in mind, one who temporarily surrenders their land patent, never truly gives up control of the land, they are in fact listed as 'rightful owners' of the land, but they have chosen to allow the land to be held in public interest of the "Whole People" aka the State of South Dakota in order to raise, collect, and remit public taxes for the sole purpose of funding and maintaining our public schools. More on land patents at a later date.
Property Taxes collected by the State of South Dakota to fund the maintenance of public schools are then deposited into the trust fund, to be proportioned equally or by an apportionment determined by the legislature. Today, the public school system receives about sixty-five (65) percent of this revenues, while counties and cities receive the balance.
Other sources of state funds include the profits created by Video Lottery, which by law the state must maintain a profit of as close to reasonable to 15% of the total receipts deposited into video lottery, depending on expenses, salaries, payouts, liabilities of the Video Lottery system, the public school trust fund shall grab the profits generated from the gaming industry, while the last source of state funds is a small percentage of Sales Tax Dollars as agreed upon when the people adopted the 0.50% tax rate increase in 2019 to help with teachers pay.
Mind you, that just cause the sales tax increase was adopted primarily to help increase teachers pay, the state government itself really has no authority given to it to force each individual school district to pay each teacher a set wage, it may only recommend, that we pay the full time teachers an average of $48,000 annually. At the end of day, each individual school district led by their governing bodies, the residents of the district have the independent right to manage all 'funds' that come into their local treasuries, whereas each school district must meet the guidelines set forth under SDCL 4-4-4 which read as follows:
Any accounting system used by any state agency or any component unit of state government shall be designed to meet the financial accounting and reporting requirements of generally accepted accounting principles
They must have an accounting system that meets the reporting requirements of generally accepted accounting principles, and it must be fair, transparent, and ethical. Meaning, the people have the right to, as any form of government agency, to inspect, audit, and review the finances of their local district to determine the total amount of revenues received, and where those revenues derive from.
Depending on the size of the district, whether rural or urban, or a mixture of both - these independent school districts themselves have the full right to borrow money from bonds, from banks, they may accept federal and state grants, they may as well accept donations and gifts as mentioned earlier, but predominantly, many of their services are collected by the 'users' or the residents who participate in the district itself. Schools charge lunch meal fees, activity fees such as sports, after school curricular activities, and other necessary fees to provide specific services.
A general overview of the Sioux Falls Public School System shows that it has a complete budget that compares heavily to the City of Sioux Falls - for the 2021 to 2022 school year, it has a $286,430,711 dollar budget, while 48% derives from property taxes; 38.5% derive from State revenues; 7.7% come from Federal revenues; 2.3% derive from other County and Local sources, while they receive another 2.9% from previous cash balances and transfers in.
As you can see, the Sioux Falls School District generates from several sources of funds, and it would not be so expected from our local district to soon be generating $300,000,000 million in gross revenues.
The question has been asked, can the Public School System survive on less property taxes - to best answer that question, one would have to monitor, and inspect, and audit the total monies from from other sources from a year to year basis, and just as your cities have to do, your school district each year must allow for independent periodic internal audits, providing the 'residents' of the district each year a Comprehensive Annual Financial Report otherwise known as the C.A.F.R.
Teacher salaries for the Sioux Falls School System make up 54.% of the total expenditures, while the likes of Capital Acquisition amounts to just 5.6% of the total expenditures for the year which amount to total $170,712,703 dollars. Capital Acquisitions can mean investments in land, buildings, infrastructure, sports facilities, vehicles, buses, any hardcore real property asset to be used for future use.
Here is an example of Capital Projects for FY-2022 as adopted by the Sioux Falls Public School System:
Capital Projects Fund – CIP Projects The projects included in the ongoing Capital Improvement Projects are:
• Lincoln High School, Washington High School, and Roosevelt High School – Expand multipurpose gym storage, expand training room and fitness areas, and provide exterior restrooms.
• Cleveland Elementary School – Finish construction on the new gym and associated rooms, convert the old gym into multipurpose room, renovate early childhood classrooms and expand the playground.
• Hayward Elementary School – Construct storage for gym, multipurpose room, and locker rooms.
• Jane Addams Elementary School – Construct new parking lot on old playground area, obtain property east of school and build new playground, relocate dumpster area, and construct new music and band classrooms.
• J.F. Kennedy Elementary School – Construct a new gym, convert old gym into multipurpose room, convert old multipurpose room into music room, and add a new parking lot and drop off area.
• Central Services Center – Begin plans for expanding vehicle garages and renovations to early childhood screening areas.
• Instructional Planning Center – Renovate lobby for security and conference room
Assessing the Total Property Tax Paid by Sioux Falls Homeowners: If we were were to calculate the total 2021-22 Revenue Plan of the Sioux Falls Public School District, which as stated above is $286,430,711 million dollars; and if the total Sioux Falls area has approximately 78,437 house or dwellings according to www.townchart.com, the average Homeowner is contributing roughly $3,651.73 dollars to their public school system. If you break that down to just property tax dollars, we are discussing $1,770.20 property taxes paid by Sioux Falls residents to support their Sioux Falls Public School System. And remember, the district receives 48% of its total revenues from property taxes.
Just as I have spoke on the fact that I feel the City of Sioux Falls could very easily decrease the Second Penny Tax, let alone remove the tax completely and still fund the costs of the City, I believe we could effectively as a state decrease the Residential Property Tax Rate on lands where those homes are located, by making a slight adjustment to commercial property tax rates, in order to help single family home owners keep more of their incomes 'free' and clear from property tax dollars. What if we were to decrease the "residential property tax rate" by at least 10%, while adjusting the "commercial property tax rate" by 5%, what would the net value be in terms of property tax dollars received by the Sioux Falls School District?
In closing, to better understand where the South Dakota Public School System gets their annual revenues, one has to fully understand What, Where, and How the Public Education System is managed within the borders of South Dakota itself. Once you determine that, then you can better understand how your school district operates, and where they choose to spend those dollars each year. In order to ensure a well operated, timely managed, and a well oil and greased education system, the people themselves must remain in total control of the governing process at both the state level, as well as the local level in order to best maintain, and manage the over all check book of their local education system.
As we move forward to help govern, to maintain, and to manage our Sioux Falls Public Education System, let's remember the words of one of our founding fathers:
The Whole People must take upon themselves the Education of the Whole People and must be willing to bear the expenses of it. There should not be a district of one Mile Square without a school in it, not founded by a Charitable individual but maintained at the expense of the People themselves; they must be taught to reverence themselves instead of adorning their servants their Generals, Admirals, Bishops and Statesmen. - John Adams
Much like his on-again, off-again friend Thomas Jefferson, and other founding fathers, Adams saw a clear link between a strong public education system and the health and strength of American democracy.
He also saw education as a vehicle for previous generations to empower future generations with the ability to learn and prosper, as he eloquently wrote in a letter to his wife, Abigail:
I must study Politics and War so that my sons may have liberty to study Mathematics and Philosophy. My sons ought to study Mathematics and Philosophy, Geography, natural History, Naval Architecture, navigation, Commerce and Agriculture, in order to give their Children a right to study Painting, Poetry, Musick, Architecture, Statuary, Tapestry and Porcelaine