The Sioux Falls School Board on Monday adopted a $343.1 million tax-supported budget for fiscal year 2027 that reduces the owner-occupied school mill rate, trims the district’s opt-out funding and keeps planned pay increases for staff.
Budget totals and where the money goes
District business manager Cameron Kerkhove told the board the total includes the general fund, special education, capital outlay and bond redemption funds. The budget document outlines planned revenue of about $233 million against projected expenses of $234.3 million for the coming fiscal year, with the district using a smaller portion of its general fund balance than in the past.
| Fund | Amount (millions) |
|---|---|
| General fund revenue | $222.8 |
| Transfer in | $10.2 |
| Capital outlay | $44.3 |
| Special education | $71.0 |
| Bond redemption | $12.4 |
| Total | $343.1 |
Kerkhove also noted a decline in the amount pulled from reserves: the general fund balance planned use drops from about $3.2 million to $1.3 million this fiscal year.
"This current fiscal year, we only plan to use $1.3 million of those fund balance, which is actually a decrease of $1.9 million which is a positive move into a good direction for the district in the financial budget," Kerkhove said.
What changes mean for homeowners and district programs
The board approved a reduction in the owner-occupied mill rate of $1.77 per $1,000 of assessed value. Kerkhove connected part of that drop to state-level changes in property tax legislation affecting school levies.
"Just that home alone, which is a very average home in South Dakota, will have over 23% reduction next year in property taxes for the school portion," Kerkhove said.
The budget also reduces the district’s local opt-out by $1.5 million compared with the original proposal; that figure was already $1 million lower than the previous year. School board president Nan Kelly said the cut will lower local school property taxes for homeowners across the area.
- Tax relief: owner-occupied mill rate down $1.77 per $1,000 assessed value
- Opt-out reduction: $1.5 million cut from original proposal
- Reserves: planned use of general fund balance reduced to $1.3 million
Board adoption of the budget comes as districts across South Dakota navigate state policy changes on property taxes and seek to balance rising costs with taxpayer pressure. For families in Sioux Falls, the immediate effect will be a modest reduction in school property taxes next year, while the district aims to preserve classroom services and staff compensation within the new spending plan.
Officials will continue to monitor state aid, enrollment trends and inflationary pressures that could affect future budgets. The board’s action this week sets spending priorities for the coming year and narrows the gap between revenue and projected expenses while easing the burden on many local homeowners.
