Funded: State Policy Analysis

A Detailed Look at Each State's Funding Policies

Below, see summaries of the state’s education funding policy in each issue area. Click the Expand icon next to any summary to see more detail, if available, about that state’s policy regarding that issue area. Click the Citation icon
next to any summary to see the sources of the information regarding that issue area.
South Dakota
Funding Basics
Formula Type

South Dakota has a primarily student-based funding formula. It assigns a cost to the education of a student with no special needs or services, called a base amount. It then accounts for the additional cost of educating specific categories of students both by applying multipliers to the base amount to generate supplemental funding and through program-based allocations.

The categories of students generating supplemental funding in South Dakota are English language learners, students with disabilities, and students in sparsely populated or small districts. Services for students enrolled in career and technical education programs are funded through program-based allocations.


Source 1
S.D. Codified Laws § 13-13-10.1 and 13-37-35.1 
Personal sommunication from Kelsey Hanson, Budget Analyst, South Dakota Bureau of Finance & Management, on 5/16/16

Base Amount

South Dakota has a fixed base funding amount per student. For FY2016, the per-student base amount was $4,877.

This means that an average student with no special needs or disadvantages would be funded at that level.

By law, the base amount is adjusted annually by the same rate as inflation (as measured by the Consumer Price Index) or by 3 percent, whichever is less.


Source 1

Expected Local Share

South Dakota expects school districts to contribute revenue to the funding of public schools. The amount each district is expected to raise for its education costs is based on its property values: for general education, each district is expected to contribute $1.568 per $1,000 of agricultural property, $4.075 per $1,000 of owner-occupied property, and $8.727 per $1,000 of non-agricultural property. For special education, each district is expected to contribute $1.409 per $1,000 of property wealth.

Once the state calculates the total amount of funding necessary to educate students within a district, it subtracts the expected local contribution and provides the difference in the form of state education aid. However, school districts in South Dakota that choose to do so may raise less, though not more, money locally than the expected amount. They may also impose taxes of up to $3.00 per thousand dollars of property wealth to fund capital projects.

The state aid formula is not the only source of revenue for South Dakota schools. Some of the other revenue sources for general education include federal grants, utility taxes, bank franchise taxes, rental income, and investment income. In FY2014, these other sources of general revenue accounted for approximately $1,253 per-student statewide over and above the per-student base amount.


Source 1
S.D. Codified Laws § 13-37-16 and § 13-16-7

Student Characteristics
Grade Level

South Dakota does not differentiate funding based on students’ grade levels.

English-Language Learner

South Dakota provides increased funding for English language learners. It does so by applying a multiplier of 1.25 to the base per-pupil amount for these students.

All students scoring below level four on the state-administered language proficiency assessment are eligible to receive this supplemental funding.


S.D. Codified Laws § 13-13-10.1(2D)

Student Poverty

South Dakota does not provide increased funding for students from low-income households.

Special Education

South Dakota funds special education using a hybrid system incorporating multiple student weights and census-based assumptions.

Students are assigned to one of six categories: five based on their specific disabilities, and a sixth for students requiring prolonged assistance. Students in each category are funded with a flat amount of per-pupil funding, which ranged from $4,896.59 to $21,634.78 in FY2016. However, the first category, for students with mild disabilities, is funded on a census basis: the supplementary allocation is applied to 10.04% of the total special education fall enrollment count rather than to an actual count of students who are assessed to have mild disabilities.

The supplemental funding for students in these disability categories is not included in an overall formula amount that is funded through a combination of state and local dollars. Districts are expected to levy a local property tax of $1.409 per thousand dollars of property valuation that is specific to special education, and the total special education allocation that a district is entitled to receive is the sum of all the supplementary funding to which its students are entitled, reduced by the amount that this tax should generate for the district. The state separately appropriates $4 million per year for extraordinary costs funding, which is available to districts fulfilling certain prerequisites that serve high-cost individual students (those who impose costs exceeding twice their supplemental allocations) or that must maintain high-cost special education programs.


Source 1
Source 2
SD Ann. Sta. § 13-37-16 and § 13-37-35.1


South Dakota does not provide additional resources for gifted and talented students.

Career and Technical Education

South Dakota provides specific funding for career and technical education (CTE) programs. It does so by subsidizing the tuition of students dually enrolled in high school and postsecondary CTE programs, and through a competitive grant.

For students dually enrolled in high school and postsecondary public universities and technical institutes, including those taking postsecondary CTE courses, the state subsidized tuition such that each credit cost only $40 in FY2016. The state also provides Workforce Education Fund grants, totaling up to $1.5 million statewide and up to $300,000 per district, to districts that successfully apply. These grants are intended for districts seeking to make transformative change in their CTE programs.

Community Characteristics
District Poverty

South Dakota does not provide increased funding based on the concentration of students from low-income households in a particular district.

Sparsity and/or Small Size

South Dakota provides additional funding for sparse school districts by applying a multiplier to the per-student base amount for students in these districts. The state also provides funding for small schools through a per-pupil grant that varies depending on the school’s total enrollment.

A multiplier of 1.75 is applied to the base amount for students in sparse school districts. The number of students for whom the multiplier is applied is not the district’s actual enrollment; it is adjusted through a calculation that considers the district’s enrollment and area. Small schools receive a dollar amount per student, based on a sliding scale that declines as school enrollment grows. Schools with fewer than 200 students receive the maximum benefit of $847.50 per student.

To qualify for sparsity funding, a school district must have a fall enrollment per square mile of 0.50 or less; have a fall enrollment of five hundred or less; operate in a geographic area of four hundred square miles or more; have at least fifteen miles between its secondary schools between its secondary school and that of an adjoining district; operate a secondary school; and impose property taxes at the maximum rates allowed. To qualify for small schools funding, a school district must have fewer than 600 students.


S.D. Codified Laws §13-13-78 and 13-13-79
Source 2