Rapid City Area School’s annual budget holds a compensation increase to maintain district talent and a capital outlay fund with a focus on a major project in Rapid Valley.

At their regular meeting Tuesday at the Rapid City Education Center, The Rapid City Board of Education approved the RCAS 2027 annual budget. The $214,758,548 budget manages 17 different funds.

School Superintendent Dr. Jami Jo Thompson outlined primary factors shaping the budget: property valuations increased about $770 million last year which impacts district funding, enrollment is down 178 students which impacts state aid, the district is implementing a 2.5 percent compensation increase to attract and retain talent, and state-level property tax relief efforts have changed the funding formula for the district.

The budget includes just more than $97 million to the general fund and about $49 million for Capital outlay. The capital outlay shows an increase of $16.3 million for 2027 primarily for the Rapid Valley Elementary addition and renovation project.

“This is a very fiscally conservative budget which is positive in terms of the impact on our constituents,” Thompson said. “We always need to balance the needs of our taxpayers with the needs of our students providing them with a high-quality education.”

Coy Sasse, the district Business Manager, said the district was facing a changing funding landscape as recent legislative changes to address property tax relief at the state level – the Homeowner Property Tax Relief Fund (HPTRF).

While the property tax relief fund didn’t change the amount of revenue the district received it did change the sources of revenue.

“The primary mechanism used to effect these property tax changes was the owner-occupied levy for school districts was significantly reduced,” Sasse said.

Before the relief measure was passed, the district realized 57 percent of funding from local property taxes and 43 percent from state aid, after the relief measure the numbers flipped – 47 percent from local property taxes and 53 percent state aid. In dollar terms, that equates to about $9 million.

“It’s significant in the sense that it turns districts to be much more reliant on sale tax as the Homeowner Property Tax Relief Fund is relied upon to backfill those missing revenues,” Sasse said.