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South DakotaHB 1051101st South Dakota Legislature (2026)HouseWALLET

revise property tax levies for school districts and to revise the state aid to general and special education formulas.

Sponsored By: Sponsor information unavailable

Signed by Governor

EducationExecutive/Judiciary RequestHoghouse-Vehicle BillProperty TaxState Aid to EducationTaxation

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 1 benefits, 0 costs, 4 mixed.

Capped property taxes fund special education

For taxes payable in 2027 and later, school boards can levy up to $1.449 per $1,000 for special education. Valuations must reflect an 85% median assessment level, and the levy does not apply to real property improvements. Districts can levy less than the maximum. The money pays qualifying special education and related-service costs for eligible children living in the district. It can also buy or lease assistive technology directly tied to special education and listed in a student's individualized education plan.

New school tax caps for property owners

For taxes payable in 2027 and later, school general fund levies have a $4.867 maximum per $1,000 of taxable value. The maximum is $1.051 for agricultural property and $0.669 for owner-occupied single-family homes. Districts can set lower rates but must keep the same proportions among rates. Valuations must reflect a median assessment level of 85% of market value, as determined by the state Revenue Department. Actual tax bills depend on the district's rates and the property's taxable value.

Schools get disability-based funding with effort limits

Beginning in 2026–2027, the special education formula includes level six disability, defined as prolonged assistance. Per-student amounts are $7,984 for level one, $16,180 for level two, and $21,340 for level three. They are $18,281 for level four, $38,590 for level five, and $12,378 for level six. Later amounts rise by the specified annual consumer price index change or 3%, whichever is lower. For taxes payable in 2027 onward, the district's effort factor equals its special education levy per $1,000 divided by $1.249, capped at 1.0. These amounts and factors help calculate district aid; they are not payments to families.

Schools count more students toward funding

Districts can count nonresident students in fall enrollment when they attend the district and are in a state agency's care or custody. Fall enrollment helps determine state education aid. The formula also adds funding for alternative-instruction students who joined qualifying high school interscholastic activities in the prior school year. Those activities must be sanctioned or sponsored by the South Dakota High School Activities Association. The adjustment equals 0.10 times the qualifying student count times the formula's per-student amount; it funds districts, not families.

Teacher funding target rises but faces reductions

For the school year starting July 1, 2026, the state aid formula uses a $63,700.69 target teacher salary. Later targets rise by the specified annual consumer price index change or 3%, whichever is lower. The formula adds benefits equal to 29% of salary; it does not require individual teachers to receive these amounts. Beginning in 2028, levy adjustments must preserve statewide local tax revenue as a share of calculated school funding need for the next fiscal year. If levies are not adjusted to preserve that share, the formula's target teacher salary must be reduced.

Sponsors & Cosponsors

Sponsors

There is no primary sponsor on record.

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 118 • No: 1

House vote • 3/12/2026

Do Pass Amended

Yes: 66 • No: 1

Senate vote • 3/12/2026

Do Pass Amended

Yes: 34 • No: 0

legislature vote • 3/11/2026

Do Pass Amended

Yes: 18 • No: 0

Actions Timeline

  1. Signed by the Governor

    3/30/2026House

  2. Delivered to the Governor

    3/12/2026House

  3. Signed by the President

    3/12/2026Senate

  4. Signed by the Speaker

    3/12/2026House

  5. Senate Do Pass Amended, Passed, YEAS 34, NAYS 0

    3/12/2026Senate

  6. First read in Senate and referral to committee waived pursuant to JR 6D-1

    3/12/2026Senate

  7. House of Representatives Do Pass Amended, Passed, YEAS 66, NAYS 1

    3/12/2026House

  8. Joint Committee on Appropriations Do Pass Amended, Passed, YEAS 18, NAYS 0

    3/11/2026legislature

  9. Joint Committee on Appropriations Motion to amend, Passed

    3/11/2026legislature

  10. Scheduled for hearing

    3/11/2026legislature

  11. Scheduled for hearing

    3/10/2026legislature

  12. Referred to Joint Committee on Appropriations

    1/15/2026House

  13. First Reading House

    1/13/2026House

Bill Text

  • Introduced

    1/9/2026

    PDF

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