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The ins and outs of opting out
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FarkAsking people to pay higher property taxes is a tough pill to swallow, said Spearfish School District Superintendent Dave Peters. He knows, because he's done it.
The district failed in two opt out attempts, one in 2002, and the second in 2005.
Rapid City School board officials announced Wednesday that they might also try for an opt out this year to avoid $4 to $6 million in cuts to meet budget shortfalls.
"We are looking at it very seriously," school board president Sheryl Kirkeby told legislators Wednesday morning.
According to the Department of Revenue, 70 of South Dakota's 165 schools districts have currently opted out of the property tax freeze set by the state.
Superintendent Peter Wharton said the district is looking at several options also, including cutting programs, freezing salaries and closing schools.
The board could approve an opt out with a two-thirds vote. Taxpayers have a right to refer the decision of the board to a vote of the people. Wharton indicated the board would want the people to have an opportunity to speak through a referendum.
Wharton said it's too early to be specific about a possible dollar amount for an opt out or for how many years the opt out would be needed. School officials said that at the current level of state funding, the district cannot continue to operate as it is.
Peters said the Spearfish district has continued to survive without the opt out by making cuts and with the assistance of $1.2 million from the sale of school property.
"It's like an opt out, but it didn't cost anyone any more money," he said.
While district officials talked about cutting programs and freezing salaries to balance the budget, they said the district's financial condition would be different if the governor and state Legislature had come through with additional funding this year.
Gov. Mike Rounds said by law, K-12 education automatically receives an increase each year from the state, which is why it's difficult to pass an opt out.
"Taxpayers don't believe they need the funding," he said. "That's why they have a hard time selling it."
Peters said with current funding levels from the state, every school district is not too far from an opt out.
"If they decide to opt out, I wish them well," he said.
Contact Kayla Gahagan at 394-8410 or kayla.gahagan@rapidcityjournal.com
What is an opt out
If a school district cannot operate on the revenues generated by the maximum tax levy for general fund and monies from state aid as determined by the funding formula, then the school district may choose to "opt-out" of the general fund levy limitations.
The opt out decision may be referred by a resolution of a school board or by a petition signed by at least 5 percent of the registered voters in the school district.
Source: South Dakota Department of Revenue and Regulation Property Tax Division
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