WELCOME to South Dakotans Talking k-12 education funding
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Transcript of WELCOME to South Dakotans Talking k-12 education funding
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How South Dakotans collect and spend money for the common good reflects our shared values — our consensus on what public services we believe we need in our state and are willing to pay for together.
WELCOME to South Dakotans Talking
k-12 education fundingFinding budget solutions through our shared values
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Coordinated by:SD Budget & Policy Institute
• Mission - to promote responsible and equitable fiscal policy through research and education
• Nonpartisan, not-for-profit 501(c)3 [not a state government function]
• Funding from Northwest Area Foundation and donations from people and businesses in South Dakota
Board of Directors SDbpi.org
Robert Burns, President
Deb Fisher-Clemens
Kay Jorgenson
Dave Volk, Vice President
Eileen Briggs Paul Dennert
Gene Lebrun, Sec/Treasurer
Rob Oliver Jim Fry
Rich Garry, Past President
Mary Bibby
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South Dakota CONSITUTION: Article VIII Section 1.
Uniform system of free schools
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.
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Research finding
• K-12 education salaries in South Dakota compared to regional marketplace
• How SD funds k-12 education and historic trends
• Educational Outcomes (South Dakota KIDS COUNT Beacom School of Business University of South Dakota)
• SD BPI preliminary research on alternatives
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Lets talk teacher salaries(SD average is 76% of regional
average)
US IA MN MT NE ND SD WY$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
40+ years snapshot of average teacher salary changes (constant 2012/13 dollars)
1969-70 1979-80 1989-90 1999-2000 2009-10 2011-12 2012-13
Chart by SD Budget & Policy InstituteData Source: NEA, Estimates of School Statistics, 1969-70 through 2012-13
MT
WY
NE
MT
MN
IA
Regional States
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Teacher Salaries
data source
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SD teacher salaries are lower than other SD
salaries
88%
76%
SD wages vs wages in neighboring states
All SD private non-farm workers
SD teachers
Iowa Minnesota Montana Nebraska North Dakota
South Dakota
Wyoming0.00
5.00
10.00
15.00
20.00
25.00
30.00
SD wages are 88% regional averageAverage hourly earnings of all employees
on private non-farm payrolls, by state (source bls SAE table 4)
2011 2012 2013
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SD teachers make more money when they choose to teach in neighboring states…
both in actual dollars and in purchasing power
SD
ND
MT
NE
IA
MN
WY
$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000
$44,875
$52,372
$53,077
$54,307
$57,573
$57,711
$60,083
39,580
47,344
49,999
48,931
51,528
56,268
57,920
Average Salary
Chart and analysis by SD BPI; Data Source NCES, Census, BLS
Teacher salaries have higher purchasing power in neighboring states.
Mt 18%
WY 34%
IA 28%
ND 17%
NE 21%
MN 29%
Where to teach?
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SD administrators also earn less than their counterparts in neighboring states…
in actual dollars and purchasing power (in all states but MT)
Administrative salaries have higher purchasing power in most neighboring
states.
NE 18%
MT5% ND 8%
WY 16%
MN 20%
IA 16%
Where to administer?
SD
ND
MT
NE
IA
MN
WY
$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000
$83,390
$90,343
$79,469
$98,457
$97,039
$100,195
$96,338
$73,550
$81,670
$74,860
$88,710
$86,850
$97,690
$92,870
Average Salary
Chart and analysis by SD BPI; Data Source NCES, Census, BLS
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South Dakota spends 25% less per
k-12 student than regional average
South Dakota
Iowa Montana Minnesota Nebraska North Dakota
Wyoming $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
6 year trend in current spending per pupil
In South Dakota and neighboring states
2007 2008 2009 2010 2011 2012
SD per student spending
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How SD funds k-12 education
Source of funds to support SD k-12 education
• Federal
• State
• Local Federal9%
state36%
local55%
SD k-12 funding sources 1997Federal16%
state30%
local53%
SD k-12 funding sources 2012
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Sources of k-12 Funding Revenue
Charts by SD Budget & Policy Institute - inflation adjusted to 2011 dollar Data Source US Census FESEF Table 11, 2002 through 2011
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Regional Rankings
data source
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Total per student funding & funding sources for SD school districts FY11
(in thousands)
$0
$5
$10
$15
$20
$25
local state federal
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School Funding Formulapage 19 of Budget Primer
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Funding formula
• 1997 per-student allocation (PSA) $3,350
• equalize dollars per student
• annual increase—lesser of 3% or rate of inflation
• 44% of districts have opted-out tax limit
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Actual PSA (per student allocation) vs inflation-adjusted per PSA
ACTUAL PSA INFLATION ADJ PSA
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% of SD state and local revenue supporting k-12 education has
decreased since funding formula implemented
1998 2003 2008 2011 20120.0%
10.0%
20.0%
30.0%
40.0%
K-12 % of state general fund down 25%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
10%
20%
30%
40%
50%
60%
70%
K-12 % of property taxes down 17%
Data Source: Dept. of Revenue annual Reports 1996 through 2013 Analysis and graphic by SD BPI
Data Source: SD Budget Analysis and graphic by SD BPI
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1961
1962
1963
1964
1965
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1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
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1979
1980
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1997
1998
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2002
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2007
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2010
2011
2012
2013
0.0
1.0
2.0
3.0
4.0
5.0State and local school revenue as percent of S. D. personal income
Year
Re
ve
nu
e %
S.
D.
pe
rso
na
l in
cm
e
State
Local
Analysis and chart provided by SDSU economics Professor Emeritus Ring
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K-12 spending as % of SD personal income
down 25% since funding formula
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0%
1%
2%
3%
4%
5%
6%
SD Ntl
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Regional States
K-12 education spending FY12Amount per student by
Source:% of
Personal Income in
state spent on K-12Total Funds
State Funds
Local Funds
Federal Funds
United States $12,331 $5,609 $5,488 $1,235 4.51%
Wyoming $18,446 $9,466 $7,372 $1,608 5.95%Minnesota $13,163 $8,306 $3,932 $925 4.36%North Dakota $13,368 $6,748 $4,980 $1,641 4.03%Montana $11,336 $5,350 $4,480 $1,506 4.40%Iowa $12,175 $5,407 $5,736 $1,033 4.64%
Nebraska $12,267 $3,876 $
7175, $1,216 4.59%South Dakota $10,149 $3,093 $5,392 $1,665 3.51%Table by SD Budget & Policy Project; Data Source US Census Bureau 2012 Public Elementary-Secondary Education Finance Report
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2014 KIDS COUNT Data BookEducation Domain
RankMN 6NE 9IA 13ND 19MT 21WY 24SD 32
South Dakota KIDS COUNT Beacom School of Business University of South Dakota
Educational Outcomes in South Dakota
How do we compare to regional states?
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NE IA MN Nation WY MT SD ND
0%
10%
20%
30%
40%
50%
60%
70%
52% 53% 54% 54%58% 60%
62% 64%
South Dakota Compared to the Nation & Bordering StatesPercent of children ages 3 to 4 not attending preschool,
2010-12
South Dakota KIDS COUNT Beacom School of Business University of South Dakota
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MN IA NE WY MT Nation ND SD
54%
56%
58%
60%
62%
64%
66%
68%
59%
62%63% 63%
65%66% 66%
68%
Percent of 4th graders who scored belowproficient reading level, 2013
South Dakota KIDS COUNT Beacom School of Business University of South Dakota
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MN ND MT SD WY IA NE Nation
0%
10%
20%
30%
40%
50%
60%
70%
53%
59% 60% 62% 62%64% 64% 66%
South Dakota Compared to the Nation & Bordering StatesPercent of 8th graders who scored below proficient math level,
2013
South Dakota KIDS COUNT Beacom School of Business University of South Dakota
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NE ND IA MN MT SD Nation WY
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
7%
9%
11%12%
14%
17%
19%20%
South Dakota Compared to the Nation & Bordering StatesPercent of high school students not graduating on time,
2011-12
South Dakota KIDS COUNT Beacom School of Business University of South Dakota
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South Dakota KIDS COUNT Beacom School of Business University of South Dakota
Education Domain Ranking
by Year by State 2012 2013 2014 2012-
2014
Iowa 14 15 13
Minnesota 7 7 6
Montana 13 13 21
Nebraska 15 17 9
North Dakota 16 16 19
South Dakota 21 22 32
Wyoming 29 26 24
= Higher ranking (lower is better)
Min
neso
ta
Iowa
Mon
tana
South
Dak
ota
0
5
10
15
20
25
30
35
Education Domain Ranking by Year and State
2012 2013 2014
Data source South Dakota Kids CountGraph by SD BPI
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Data & Graphic Source: Testimony by SD Dept. of Ed. to SD Joint Appropriations Committee January 2014
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Research on alternatives“how to slice the pie”
1. Status quo
2. School consolidation
3. Equalizing capital outlay or “other” funds
4. Cap reserves
5. Additional revenue earmarked for education
6. Prioritizing k-12 salary policy
7. Change funding formula CPI measurement
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1998 2003 2008 2011 20120.0%
10.0%
20.0%
30.0%
40.0%
K-12 % of state general fund down 25%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0%
10%
20%
30%
40%
50%
60%
70%
K-12 % of property taxes down 17%
1. Status quo
• decrease in % of revenues committed to k-12 education will continue
• free up current revenue growth for other priorities (examples: economic development, infrastructure, Medicaid expansion)
• Allows additional opportunity for decreasing current taxes
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2. Consolidation151 school districts in South Dakota
Less than 250 stu-
dents (37 dis-
tricts)25%
250 to 600 stu-
dents (46 dis-
tricts)30%
Sparce (28 dis-
tricts)19%
more than 600 stu-
dents (40 dis-
tricts)26%
Data Source: South Dakota Department of EducationGraphic by SD BPI
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Would consolidating small school districts increase economy of scale?
Less than 250 students (37
districts)25%
250 to 600 students (46
districts)30%
Sparce (28 districts)
19%
more than 600 students (40
districts)26%
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Is consolidation an answer?
no consolidation Consolidate 37 schools with < 250
students
Consolidate 83 schools with < 600
students
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$977,652,374.00 $960,965,662.58 $943,788,031.62
How much would consolidation cut education expenses in SD?
-1.7%
-3.5%
Status quo
Data Source SD DOE 2012-13 expenditure data & rankings; SD DOE Scarcity Funding. Analysis and chart by SD BPI Assumptions only non-sparce districts consolidated, economy of scale equal to average per student expenditures in SD districts with >600 students
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3. Equalizing “other” revenue“Other” revenue are not currently equalized and range from $130 to $3,202 per-student, depending on the district.
Slide 79 k-12 Education Funding Presentation to Legislative Planning Committee June 16, 2014 by Michael Houdyshell, Director Property and Special Taxes Division SD Dept of Revenue lhttp://legis.sd.gov/docs/interim/2014/documents/LPC06-16-14Combined.pdf
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Slide 83 k-12 Education Funding Presentation to Legislative Planning Committee June 16, 2014 by Michael Houdyshell, Director Property and Special Taxes Division SD Dept of Revenue lhttp://legis.sd.gov/docs/interim/2014/documents/LPC06-16-14Combined.pdf
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Cap school district reserves
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4. Additional revenue options
• Increasing state sales tax from 4 to 5 cents would raise $206 million per year
• Additional revenue options used by other states:
• personal income taxes,
• corporate income taxes,
• Sunset clauses on existing tax expenditure statutes
• higher bank franchise taxes,
• higher “sin” taxes on tobacco or alcohol, sunset existing tax expenditures statues
• Other examples you can think of?
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5. Prioritize k-12 salary policy
State salary policy modelsEmployee compensation plan
• PACE “movement to job worth” in place since FY92
• Market-based-pay in place since FY13
(Note: annual FY15 cost $13 million—beyond 3.0% across the board raises)
Investment council compensation plan (10 year plan) increases:
• Base compensation & benefits @ 7% per year from $184,000 to $362,000 annual ave.
• Incentive compensation & benefits @ 7.2% per year from $301,000 per FTE to $602,000 per FTE
(Note: total personal services under Investment Council 10 year plan increases from $8.5 million to $18.1 million for 30 FTE)
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Public Questions:Increasing or changing the
CPI limit used in the formula
• Did the funding formula start out high enough per student?
• What happens when you limit growth to the lower of inflation or 3%?
• Are there more accurate inflation measuring tools available?
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Small group discussion
1. Choose a facilitator
2. Choose a recorder
3. Discuss k-12 education funding and/or teacher salariesRecord ideas as you go:
areas of general consensus you discover
Recommendations or action ideas
4. Prioritize the top 1 or 2 issues you want to share with a larger group
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Large Group Discussion
• If you are meeting in a large group – share the range of ideas and options generated with each other.
• Discuss and then vote for your top priorities
• Please let the Institute know the outcomes of your dialogue so we can compile it with conversations from around the state (send to [email protected])
• If you choose to form ongoing community discussion groups please let us know and we will provide you with contact information for other ongoing grass roots conversations that form around the state
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Evaluation• Please fill out the evaluation – it helps SD BPI provide meaningful reports
on this process
• If you know of other communities that would like to hold this discussion or if you would like to have it repeated in your community – contact SD BPI
South Dakotans Talking
Help us describe who participatedHow long have you lived in the community? < 5 years 5-20 years 21-35 years 35+
years
Age Range 18-35 36-50 51-65 65+
Employment status Self employed employed full-time employed part-time student work at home unemployed retired no answer
Where do you live? On a farm, ranch or acreage In a small SD town (< 1,000) In a medium sized SD town (1,000 to 5,000) In a larger SD town (> 10,000) How would you describe your general world view? Conservative moderate progressive
How was your experience?What was your best experience of the event? Did this event None--somewhat-alot •Increase your understanding of this topic? 1 2 3 4 5•Change your perspective on this topic? 1 2 3 4 5•Increase your ability to engage on this topic? 1 2 3 4 5
• As we facilitate more annual “South Dakotans Talking” events, what should we do differently?
•Are there other topics you would like to discuss?
Thank you
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How South Dakotans collect and spend money for the common good reflects our shared values — our consensus on what public services we believe we need in our state and are willing to pay for together.
THANK YOU for being part ofSouth Dakotans Talking k-12 education funding
Finding budget solutions through our shared values