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Senate Approves Sneaky Voucher Plan: State Could Give Church Schools $1.37 Billion

Last updated on 2016.02.10

The South Dakota Legislature holds deep respect for the committee process... until it gets a chance to disrespect public education.

While the South Dakota House yesterday insisted on respecting the committee process and refused to resurrect House Bill 1223, the Common Core ban, from its committee failure, the South Dakota Senate said Committee, Schmommittee! dragged Senate Bill 189 back from its committee failure and passed it 23–12.

HB 1223 might at least have improved public education by getting Common Core off teachers' backs. SB 189 harms public education and the state budget by diverting tax dollars to private schools. The convoluted mechanics of the bill allow the state to say it's not writing a check to any religious school (which would be a problem): under SB 189, insurance companies give money to non-profits; those non-profits give money to lower-income families; those families give their money to private schools; the state says to the insurers, "How nice!" and knocks up to 90% of the insurers' private school scholarship contributions off their premium and annuity tax.

As educator/blogger Michael Larson says, SB 189 is a voucher sneak attack. He notes that SB 189 hurts public school districts by removing kids from their rosters money from their state funding without proportionately reducing those public schools' costs... which of course is what Governor Dennis Daugaard*, the GOP majority in Pierre, and the Christian crusaders who testified for SB 189 want to see happen.

SB 189 as several additional problems:

  1. SB 189 starts with scholarships for families who make 150% or less of the income threshold for free or reduced lunch the year before they enter the program. But it allows families to keep claiming that credit if their income exceeds that threshold. Consider: my family could easily have qualified for such a credit based on our low grad school/part-time income last year. Now that my wife has full-time professional employment, and if I gain similar full-time employment in the coming school year, we'll be far above that 150% threshold. We'll have no need of financial assistance to send our child to private school, but SB 189 would require the state to keep handing out that subsidy for three years.
  2. SB 189 caps creditable scholarships at four million dollars. "However," reads SB 189, "if in any fiscal year the total amount of tax credits claimed is equal to or greater than ninety percent of the maximum amount of tax credits allowed for that fiscal year, the maximum amount allowed for the following fiscal year shall increase by twenty-five percent." Wow! Pierre never increases school funding by 25% just because the schools claim more expenses. If we applied SB 189's funding mechanism to determining the per-student allocation, public schools could spend just 95% of the per-student allocation and trigger a 25% for the coming year. SB 189 is giving private schools a funding advantage that public schools never get.
  3. If insurance companies and the private schools play their cards right, that 25% growth rate would lead to SB 189 handing out $133 million in its first ten years and $1.24 billion in its next ten years.
  4. The insurance tax is projected to put $83.4 million in state coffers in FY2016. Those receipts have grown 5% over the last two years. Extrapolate that growth rate, and the insurance tax alone could support SB 189's private school subsidy's explosive through FY2034—seventeen years to wreak havoc on public school finance and the state budget.

If you believe in strong public schools, you vote Senate Bill 189 down. If you believe in separation of church an state, you vote this sneaky voucher plan down. If you believe in a sound state budget, you vote this plan down.

*Update 16:24 CST: To be clear, the Daugaard Administration did not testify in favor of SB 189. Other actions by the Daugaard Administration (Exhibit #1: 2012's HB 1234; Exhibit #2, ongoing neglect of K-12 funding...) demonstrate a lack of respect for public education, but last week, the Governor sent the Department of Education and the Department of Labor and Regulation to testify against SB 189. The proper read of that testimony is less likely a desire to defend public education and more likely a desire to oppose blasting a four-million-dollar hole in the budget.


  1. Nick Nemec 2015.02.25

    The song we always hear out of Pierre is that we can't afford to increase public school funding and we can't afford to expand Medicaid, now the Legislature can shake loose money for ideas like this. What happened, did they check the couch cushions in the Senate lobby? I've always known the "we can't do anything" shrug our legislators give us is a load of crap, this vote proves it.

  2. caheidelberger Post author | 2015.02.25

    Good point, Tim! SB 189 is playbook ALEC, weakening one of the great nexi of opposition to our corporate overlords.

  3. caheidelberger Post author | 2015.02.25

    Indeed, Nick: they haven't even turned SB 189 into one of the "one-dollar" bills, where they reduce the funding line to $1 but keep the bill alive while they await the final word from the Appropriations committee as to how much money will be available for the various bills. The Senate yesterday committed four million dollars from the treasury to this program, other budgetary priorities be darned. This plan costs more than Medicaid expansion, but the Senate says go for it.

  4. rollin potter 2015.02.25

    I got lost in the shuffle a long time ago but were the schools supposed to receive a share of the money that the low life scum bags in pierre rip off of the poor people who can't afford it to support there scratch tickets and lottery money?

  5. 12 2015.02.25

    I cannot get behind publicly funded scholarships to send kids to private schools. I feel like I'm not far off base by stating that the majority (all?) of the private schools in the state of South Dakota are religious private schools. I feel like this directly violates separation of church and state; furthermore our public schools are hurting as it is and I cannot in good conscience support anything that gives money to private schools when the state of financing our public school system is in such a shambles. This is bad legislation. Period.

  6. mike from iowa 2015.02.25

    How did Hickey vote?

  7. Nick Nemec 2015.02.25

    Hickey is in the House this was a Senate vote.

  8. mike from iowa 2015.02.25

    Thanks for the correction,Nick. That'll learn me to read the whole article.

  9. Tasiyagnunpa Livermont 2015.02.25

    We must rid our state of these voucher plans. There are practically zero secular private schools (like Montessori or something) in the state. This is for religious education. If people want private religious education, then they and their churches or whatever can pay for it. They are not teaching children to live honestly in a pluralistic society and are undercutting our civic base.

  10. WayneF 2015.02.25

    The South Dakota Constitution is very clear on this issue:
    Article VIII: section 16: "No appropriation of lands, money or other property or credits to aid any sectarian school shall ever be made by the state, or any county or municipality within the state, nor shall the state or any county or municipality within the state accept any grant, conveyance, gift, or bequest of lands, money or other property to be used for sectarian purposes, and no sectarian instruction shall be allowed in any school or institution aided or supported by the state."

    There are some smart people in Pierre representing South Dakota citizens. But there appear to be fewer of them every year.

    Lawmakers: read your Constitution!

  11. leslie 2015.02.25

    well said tasi.

    did we drop the ball this session trying to get medicaid expansion; what is the latest from hunhoff?

  12. mike from iowa 2015.02.25

    Surprised they didn't blame Obama for the increase in health insurance premiums. Wonder what kiddie molesting liability insurance costs?

  13. Joan Brown 2015.02.25

    I don't think any private school should receive public money. If people want to send their kids to private schools let them pay for it. Let their schools just be a plain building that is affordable, instead of the beg fancy building like O'Gorman in SF.

  14. Owen 2015.02.25

    My wife, a teacher, heard about this bill today and she was livid. As she said, they don't have enough money for public schools but they want to give people money to send their kids to private school.
    I won't use the exact words she used.

  15. Jason 2015.02.25

    Latest from Hunhoff? He voted for SB 189. He told me there was "more to the bill" ...

  16. Jaka 2015.02.25

    Just more evidence of SD GOP reliance on the nexus of ALEC/Koch bros/and religious bigotry trying to use 'public funds' to pad business interests! Horrible! Sinful and arrogant GOP b.s. legislation!!!!!!!!

  17. Curt 2015.02.25

    Jason -
    It appears to me that horses are being traded. Stay tuned.

  18. WayneF 2015.02.25


    Can you please give us an update on who's taking advantage of state-paid ALEC dues? There's a scandal that needs some clear reportage. Thanks!

  19. El Rayo X 2015.02.25

    Let's just keep the insurance premium and annuity tax in the state treasury and remove the property tax exemption for churches and private schools. That additional revenue can be used to raise teacher pay, fix roads and bridges and other costs associated with living in a developed nation. The first amendment gives us the right to worship whom ever we choose. If you want that right, pay for the government that guarantees you those rights. If you think religion should be tax free because it's constitutionally guaranteed, then my favorite gun shop and range should have the same benefit.

  20. Open Mind 2015.02.26

    Holy Smokes! I can't think of what to say next!

  21. leslie 2015.02.26

    JASON, IS SB189 a public tax credit to insurance co. paid scholarships to private schools? hmmmm

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