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How Much Would Teacher Pay Raise Affect SD Households?

Raising money to increase teacher pay is the reason for legislation scheduled for a vote today at the South Dakota Legislature. (iStockphoto)
Raising money to increase teacher pay is the reason for legislation scheduled for a vote today at the South Dakota Legislature. (iStockphoto)
February 16, 2016

PIERRE, S.D. - A move to turn around South Dakota's worst-in-the-nation teacher pay could come up for a vote with state lawmakers today. The bill includes a sales tax hike and a property tax reduction.

Joy Smolnisky, executive director with the South Dakota Budget and Policy Institute, says for middle-class earners with a $250,000 home, they'd save about $113 a year on property taxes.

When the sales tax bump is added, however, they'd end up spending an extra $154 a year. She says that raises some important questions for homeowners.

"Am I willing to invest this much in order to be able to have a competitive school system that brings in good teachers? What about the school districts that can't even attract a math teacher," she says. "How will my kid do in that district?"

House Bill 1182 is part of Gov. Dennis Daugaard's plan to bump up sales taxes by a half-cent to raise about $107 million for a teacher pay increase.

The governor's plan also includes a $40 million property tax reduction. The state's low-income renters may not see direct benefits from the property tax relief, while they might end up paying an extra $72 in sales taxes.

Smolnisky points out any tax increase can be difficult for low-income households, but thinks investing in the state's teachers is critical.

"In all the states around us, the pay is significantly more, even after you've adjusted for cost-of-living and the tax structure," she says. "So, it's really difficult for us to attract quality teachers to stay in South Dakota."

The bill was postponed by House lawmakers last week, and put on the legislative schedule for today. The Senate also will be considering similar bills in the coming weeks.

Brandon Campbell, Public News Service - SD