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Moonshot Teacher Pay Plan Makes Mainstream Press

Patrick Anderson features my moonshot plan to raise teacher pay $10,000, to 34th in the nation, on the education e-pages of that Sioux Falls paper. My plan secures that monumental raise, around $92 million a year spread among about 9,200 K-12 teachers, by lifting 16% of the $582 million in sales tax exemptions the state grants to favored goods and services.

Actually, let's update that: The Governor's proposed budget for FY2016 includes $735 million in sales and use tax exemptions and other tax expenditures. For our moonshot teacher teacher pay raises—which simply make our wages competitive, not over the moon—we need 12.5% of those exemptions, one out of eight dollars.

Anderson notes that a third of the sales tax exemptions are for ag products (e.g., cattle feed and bedding, tractor fuel, swine and bull semen) and asks if nixing those favors would unfairly burden farmers. (Ah, clever, corporate journalists, trying to split the Democrat farm-teacher alliance!) I don't have any particular 12.5% on the chopping block yet. I've certainly never suggested we should take all of the exemptions from the farm sector. To the extent that it is possible to levy a regressive tax fairly, we should spread the exemption cuts around to share the burden among those best able to bear them, to tap wealth where wealth lies. I suggested in our phone interview we might do better to cut the exemption for shoppers' guide ink and advertising... but somehow that suggestion didn't get past the editor's desk at that Sioux Falls paper.

I also told Anderson in our phone conversation that I recognize that ending our our national embarrassment as the state that values teachers least by raising a regressive tax is a suboptimal solution and that many teachers would likely vote against raising their pay by expanding a regressive tax. I'd be open to a wide array of superior funding mechanisms for competitive teacher pay—corporate income tax, re-appropriation of corporate welfare, pot of gold at end of rainbow. I'm just offering a plan within the realm of the politically possible.

It thus seems perfectly possible to sir down with smart people in government and industry and prioritize those exemptions. Which exemptions serve the greatest public purpose? Which cuts will fall on sectors best able to bear them? Make list, cut off the bottom eighth (eighth, I said, eighth!), and we have competitive teacher wages.

And with seven-eighths of the exemptions, $643 million dollars, still on the table, we'd have plenty of room left to consider lifting exemptions to reduce or eliminate the tax on food, the way Minnesota and other civilized states do... because after all, how fair is a tax system that taxes your bologna sandwich but not bull semen?


  1. John Tsitrian 2015.01.28

    Where do I click on the proposed budget site to find a list of sales tax exemptions?

  2. jerry 2015.01.28

    South Dakota state employees are covered under a blanket health care plan provided by the state. Teachers could get that $10,000.00 raise by simply putting them onto the states insurance plan.

  3. PlanningStudent 2015.01.28

    I wish someone with more time and analytical skills than myself could delve deeper into statement from my local county assessor: that since the implementation of the new(ish) property valuing system for ag, that ag land is now sharing a much smaller proportion of the property tax and thus education funding burden and shifting a large portion of that burden to home owners. Has the implementation of our current ag land valuing system the compounded our education funding problem? If so is that one of the places we should first re-visit?

  4. Nick Nemec 2015.01.28

    Thanks for the list Cory. Now the nerds among us can drill down on it and flesh out your plan.

  5. Joseph Voigt 2015.01.28

    Raising salaries needs to happen, but a smart merit pay system could help as well. Here in Arizona we have one that has some state guidelines but local control, the state gives so much money but the local districts can add, and it's not cutthroat either

  6. WayneF 2015.01.28

    The best solution to regressive taxes is to add progressive taxes: to wit: a personal income tax that requires people to support public services according to what they earn.

    A two-wage-minimum salary family in Huron, South Dakota, pays sales, fuel, and other taxes at the same rate as a multi-millionaire living in Dakota Dunes.

    I confess that this idea is probably dead in the water since most of the SD state legislators fall more in the Dakota Dunes category than the minimum-wage ones.

    But one can hope.

  7. Curt 2015.01.28

    It would certainly be refreshing if some courageous leader (do we have any?) would bring a plan like this forward. It would at least be instructive for voters to see which of their elected representatives would embrace it. We can be pretty sure it would not get far given the current climate, but it would still be fun to watch them handle the hot potato.

  8. john tsitrian 2015.01.28

    Thx Cory.

  9. S Hart 2015.01.28

    Response to Joseph Voigt:
    I would support a fair and equitable merit pay system, but not until all teachers are paid a salary that reflects their educational commitment. It’s like telling people at a food pantry to prove they are worthy before they can have any food.

  10. Joseph Voigt 2015.01.28

    I agree, base salaries are too low to attract anyone to the business.

    I just keep hearing merit pay won't work cuz it'll put teachers against one another, where in Arizona where I work for the most part it's not but districts can chose to make it so

  11. SuperSweet 2015.01.28

    Performance pay (not merit pay) can work for educators where all are rewarded if test scores improve or other group goals met. This gives rise to cooperation which works whereas competition does not work when teachers compete with one another for pay. This has worked in my district in Minnesota.

  12. WayneF 2015.01.28


    I'm all for cooperation instead of competition in public education. But what's the difference between performance pay and merit pay? And what test scores "count"? What are "other group goals" that should be met?

    I've taught for more than forty years at several grade levels in many schools and colleges. I am saddened that educational quality has been reduced to measurable, objective criterea. There is much growth ... maturity, creativity, responsibility ... that can't be measured by graphs, tests, and charts.

    I'm not opposed to measurement ... all teachers need to use it. But when funding for public schools rests on the same criteria as beer production (see Thorndike), we are in serious trouble.

  13. Anne Beal 2015.01.28

    What guarantees that the money raised would actually go to the academic teachers and not get blown on athletic programs?

    I attended a public high school with over 1000 students and we did not have football, as it is a waste of money. Insaner heads eventually prevailed, and they got a football program started and it was still a waste of money.

  14. SuperSweet 2015.01.28

    WayneF Years ago I attended a workshop on teacher compensation put on by Allan Odden of the University of Wisconsin. I bought into his concepts. When he saw I was from SD he said Gov Janklow had talked to him about compensation strategies for teachers and he told Gov Janklow that these strategies wouldn't work in SD because teacher pay was too low to begin with. Merit pay has not proven to work in schools. You can design measurable outcomes that teachers will buy into in a performance pay model. We have done that, as have a number of schools in MN and the teachers buy into it. See "Paying Teachers for what They Know and Do" by Allan Odden.

    I don't see the relevance of funding for schools with beer production in this context.

  15. Larry Kucker 2015.01.28

    I hope someone can add an opinion without bloodshed...but missing out on $735M of revenue due to tax exemptions is astounding to me. Plus ignoring the tax impact of the economic multiplier effect that could occur from an expansion of Medicaid of over $225M per year (not withstanding a gradual State buy in up to 10% of the total cost over time which sales tax could offset) tells me that there is a lack of calculated thinking of the current administration.

    Spreading the total needed tax burden over the population equally seems to be the fairest way to treat all of the citizens of South Dakota. The legislators we elect are charged with raising and spending tax dollars efficiently. Let them do their job when the tax levy is fair and economic development is enhanced through dollars that SD taxpayers are paying for other States Medicaid Expansion recipients.

  16. WayneF 2015.01.29


    I understand now the distinction between merit pay (counter-productive) and performance pay (promising). But I still don't understand what "measurable outcomes" you refer to. Scores on standardized tests?

    Educational psychologist E. L. Thorndike said, in brief, if you can't measure it, don't talk about it. He had studied the production process at the Guiness brewing factory and attempted to apply it to education.

    Human beings are not products whose quality can be exactly measured and controlled. This was the point behind my beer analogy.

  17. WayneF 2015.01.29

    Don't mean to diss you SuperSweet, but going to a workshop is no substitute for understanding educational history and philosophy.

    Are you still "in the field?" Or are you retired? Just wondering.

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