South Dakota educators receive salary and compensation boost from SB 127; budget concerns now loom for school districts

RAPID CITY, S.D. (KEVN) - A state senate bill signed March 13 saw a win for educators across South Dakota, but for some of the school districts, it could be a minor headache.

School boards are heading to the drawing board to make sure they have funds in place to pay those educators while still having money left over for district expenses.

South Dakota Senate Bill 127 was signed on March 13, and it marked a major victory for educators. Setting the minimum teacher salary to $45,000, along with setting an average compensation amount unique to each school district.

Declining student enrollment in the RCAS district is bringing in fewer state funds because those funds are tied directly to enrollment, putting the district in a tough situation.

“For our district, in the unique situation that it’s in, We will see declining revenue on the state side; we do see increased resources coming through property tax, but because of the way that those factors interact, overall the amount of resources that we have moving into the general fund grows very slightly moving into the next year,” explained Rapid City Area Schools chief financial and operations officer Coy Sasse.

That slight projected increase is about 1.5% for FY25′s General Fund Projections, with the district netting in just under $1,570,820 in total. That’s with RCAS only receiving around $40,214,205 in state funding compared to $43,589,946 during FY24.

“The concern is not necessarily next year; the concern is really how we move into 3, 5, and 7 years down the road,” expressed Sasse.

For the district to balance out the decrease at the state level, funds would need to increase on the local side to meet budget projections. Prompting the district to find alternate ways to raise those funds without hurting taxpayers.

“Comes through additional revenue generated from an opt-out from your property tax or leaning on what is called capital outlay flexibility, which is essentially the ability to pull revenue over from the capital outlay fund into the general fund,” explained Sasse. “That’ll be something we monitor really closely as we move into the future to understand how we engage in budget reduction and how we bring the financial system back into alignment.”

While the signing of SB 127 into law is a cushion for South Dakota educators starting in July 2026, RCAS and other school districts across the state will need to find more ways to accommodate the total teacher compensation now required by the law.

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