Aid Won’t Help S.D. Schools (SD)

August 27, 2010

The federal government has accepted South Dakota’s plan for using $47.2 million in aid money, but the outcome is a major disappointment for education groups that had hoped to see some of that money flow to schools.

Under the state’s plan, the $47.2 million – $20.9 million for Medicaid and $26.3 million for education – will be used in place of state general funds. The federal money will allow the state to save the money that it would have otherwise spent on those programs.

But that’s not what education groups wanted, especially in a year when the state budget provided no increase in the amount of money for K-12 education. School leaders had hoped the federal bailout money would be added to what the state already was spending on education, rather than replacing that money.

"The reason we lobbied for it is because it was supposed to help school districts," said Sandra Waltman, spokeswoman for the South Dakota Education Association. "It wasn’t intended to balance state budgets."

But help in balancing the state budget probably is what the money will do. Lawmakers face a budget deficit for next year that is estimated at $86.5 million. The state can raise that amount by tapping two reserve funds, but an extra $47 million could preserve more of the state’s reserves if that’s how lawmakers decide to use the money.

"There’s no question this will help next year’s budget immensely," said Joe Kafka, spokesman for Gov. Mike Rounds.

The money comes after Congress this month passed a $26.1 billion aid package to states. The package extends higher federal payments for state Medicaid programs as well as provides money for education. Some states face drastic budget cu ts that could mean layoffs in education, and the Democrat-sponsored plan could avert those job cuts. South Dakota Rep. Stephanie Herseth Sandlin was among the lawmakers who voted for the plan.

The plan allowed school districts to apply directly to the federal government for money, but because the state applied, school districts in South Dakota could not, Waltman said.

Soon after the aid package passed, Rounds said South Dakota might not accept the education portion of the money because he feared it would come with "strings" attached that would force higher property taxes. But in a release Thursday announcing the federal government’s approval of South Dakota’s plan, Rounds said state officials worked with the Department of Education to ensure South Dakota’s plan for the aid money would meet federal requirements.

State lawmakers earlier this year passed a budget that included no increases in funding for K-12 education. In past years, school districts received at least the rate of inflation or 3 percent through the state formula for funding education. Had lawmakers stuck with the formula, school districts would have received a 1.2 percent increase. That translates to an extra $57.66 per student that districts did not get. The most recent count of students in the state’s K-12 system was at 121,015.

Now, school officials are looking ahead to next year’s session in the hope that some of the federal money can be directed their way.

"The positive side of this – if there is a positive side – in the 2011 legislative session, hopefully we’ll remember the fact that the state budget got this help," said Brian Aust, spokesman for the Associated School Boards of South Dakota.

There will be a new gover nor and Legislature in 2011, and the money still could be redirected by leaders in Pierre to help school districts, Aust said.

"They can definitely change it," he said.

At the very least, lawmakers next year should consider reinstating the 1.2 percent that districts should have received this year, as well as any additional inflationary increase for next year, Waltman said.