District takes novel approach to levy

The Hill City School District Board of Education will review the district proposed budget at its next meeting June 10. 

This is an opportunity for the public to raise concerns about what the district spending plan looks like. The budget for the district is broken into several funds. 

The Special Education fund, (22) is funded through various means including federal dollars and taxpayer money.

The Food Service Fund (51) and the Fitness Center fund (53) are enterprise or business funds and have to fund themselves. The food service fund is doing too good of a job funding itself because of  Elementary and Secondary School Emergency Relief money, so the district is spending it down by offering free breakfast to all students for the 2024-25 school year.

“We’re in the business of education. There are studies that prove that well-fed kids learn and if they’re not fed they struggle. That’s why we’re spending money on feeding kids instead of on more equipment we don’t need,” said school district business Manager Cassandra Ott.

Ott says the district’s current kitchen is, “well situated”  so “that’s not where we’re putting our money.”

Ott thinks feeding children is a “priority” in the district, evidenced not only by this free breakfast initiative but by the Angel Fund program, a grassroots campaign which helps to pay food service bills of families that are struggling.  

Ott says the district food service vendor Lunchtime Solutions is efficient and offers a lot of healthy food options including a large veggie bar. The Food Service Fund is highly regulated since it receives money from the federal government through the school nutrition program. A full price elementary student lunch in the 2023-24 school year cost only $3.05. 

The Impact Aid fund (27) is funded by payment in lieu of tax dollars that the district gets from the federal government. Essentially it’s an amount the federal government gives the district because so much land in the area is federal and is not subject to property taxes. 

Ott says “it’s a pathetically small percent based on acreage. In the 2023-24 school year Hill City School District received $441,033 in Impact Aid.”  

This is less than Custer or Douglas school districts received. The district uses that money to offset some general fund expenditures.

It is also part of the reason the district had financial issues several years ago since it hadn’t received an Impact Aid payment for three years. 

“There’s a pretty huge lobbying group that goes to conventions and meets with the legislators in D.C. It’s something they have to constantly work on every year to keep that money flowing into school districts, Ott said.

Ott said some years the federal government is  behind and it doesn’t pay and some years it is ahead. The district has been guaranteed that same amount since 2009.

“Our goal is to not be reliant on Impact Aid,” Ott says.

Unlike some other funds the district can use this money any way it wants but generally uses it to “ operationalize the money in the general fund.”

The General Fund (10) and the Capital Outlay Fund (21) are funded through taxes and are also heavily regulated as to how they can be used. Currently the only funding source for the general fund is  property taxes, because the district doesn’t qualify for state aid. This means that zero sales tax dollars are returned to the district from the state to help offset education. 

The budget process is a bit complicated because of the way South Dakota property taxes get paid (a year behind) and the way school districts’ budget year begins July 1 and ends June 30.

Essentially Ott knows the first half amount the district will receive but has to “project” what the next year’s second half is.

The district expects to receive $3.6 million this current school year. (2023-24)

As for the proposed 2024-25 budget, the district is looking at things a little differently than ever before. In the past few years “taxes increased significantly and we weren’t expecting that,” Ott said. Because the district is regulated by the state as to how much it can have in its general fund, it needed to spend the money it received.  

If the district has too much money in savings it gets put on the “naughty list” by the school finance accountability  board and in theory that board would dock the district’s state aid (which it can’t because the district doesn’t receive that aid) 

For 2024-25 the district is going to ask the county to levy the amount it needs. 

“We’re gonna ask for $4.2 million. We’ve set the line so if our taxes do go up we’re not gonna get the extra,” Ott said 

Normally the district asks for the max, “whatever the legislature says we should get. it’s a percent levy,” Ott said.

Every school district in the state asks for the max, Ott said, and over half of them ask for an opt-out for additional funds as well. That is partially because the state increased the base salary of teachers to $45,000. 

“We chose to do that ( raise the base salary), even though we’re not getting state aid,” Ott said, adding it’s a way to stay competitive. The district is also giving teachers $455 for each year of longevity pay.

“The Hill City School Board is intentional about lowering the property tax levy while still providing a top education,” said superintendent Blake Gardner. “We have scrutinized every expense and been extremely efficient to ensure that we are in a position to meet both goals of lowering tax levies and being the best school in South Dakota.”

Ott said it’s merely a question of adhering to a budget.

“We’re big budgeters, right? And we have  budgeted to spend $4.2 million So if we don’t need more than that, why ask for more than that?” she said.

Historically the district has been in the top three schools in the state. Ott does not see that changing, noting the great staff the district has worked hard to hire.

“I’m excited for the future,” she said.

The Hill City School District proposed 2024-25 budget is available online for taxpayers and stakeholders to view.

The public is welcome to attend the budget hearing June 10 at 6 p.m. in room 202 of the high school.