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Timothy Mitchell, superintendent of the Rapid City Area Schools, left, sits next to Jim Hansen, president of the local Board of Education at a board meeting in the spring. 

A budget move that was once unthinkable to some local school officials has now been deemed necessary to raise teacher pay in Rapid City.

Thursday evening, representatives of the school board and teachers’ union reached tentative agreement on a contract for the 2015-2016 academic year. The agreement comes just a month before classes are scheduled to begin.

According to a news release from the district, the linchpin of the deal is an agreement to divert $4 million in capital outlay funds toward general fund expenses, and then use the freed-up $4 million in the general fund to raise teacher pay.

The budget maneuver is allowed by a state law that was adopted in 2009 and was supposed to sunset in 2012 but has since been renewed through 2018.

Back in 2009, Rapid City Area Schools Assistant Superintendent Dave Janak said diverting capital outlay money to general fund expenses would be unwise.

At the time, he was quoted by the Journal as saying, “The district is adamantly opposed to that transfer.”

Interviewed Friday by the Journal, Janak stuck to the facts of the budget shift, saying it will move capital outlay funds to some of the items specifically allowed by law. Those allowable items include property and casualty insurance, energy and utility costs, motor fuel, and any portion of a contract providing transportation to students or any mileage reimbursements.

Without the law allowing capital outlay funds to be used for those purposes, capital outlay money would normally be restricted to land, buildings and equipment.

Jim Hansen, president of the Rapid City Board of Education, said the budget move represents a change in direction.

“The teachers are our strongest asset in the community,” he said. “We have to do something for them.”

He added that the use of capital outlay funds for general-fund expenses is “not a sustainable fix” because it means less money will be available for building needs.

“The effects on buildings and other expenses will happen immediately,” Hansen said. “We have 31 properties that we have to take care of.”

Jackie Waldie, a former teacher who runs a 718-member Facebook group called Reviving Rapid City Schools, said the budget shift is a consequence of voters’ June rejection of a property-tax increase to pay for schools. The budget crisis is causing school leaders to prioritize and make sacrifices, Waldie said, and she’s glad the board is temporarily sacrificing buildings in favor of teachers.

“There was so much bitterness in our community that some kind of gesture had to be made to show that we valued our educators,” Waldie said.

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She said teachers are welcoming the gesture and breathing “a huge sigh of relief.” Waldie said if she were still teaching, the budget move would bring her a raise of “multiple thousands of dollars.”

Several teachers sought for comment Friday by the Journal did not return phone messages.

A news release from the district said the teachers' higher pay will take the form of scheduled, stepped pay increases that were not awarded in recent years due to budget cuts.

“This move will place educators at the step appropriate to their years of experience,” the news release said.

The most current data available from the state Department of Education listed average annual pay for a teacher in the Rapid City Area School District as $41,562 during the 2013-14 school year. The statewide average during the same period was $40,023.

According to National Education Association data being studied by South Dakota Gov. Dennis Daugaard’s Blue Ribbon Task Force on education, South Dakota has the lowest average teacher pay in the nation. The task force began meeting earlier this year and will continue to meet through the fall, when it could make recommendations to the Legislature on funding and other education issues.

Sue Podoll, president of the local teachers’ union, which is officially known as the Rapid City Education Association, said the new deal gives teachers some hope while longer-term funding fixes are sought.

“The perception I’ve been receiving is that people are very happy and very pleased,” Podoll said. “This gives them something that has been missing for a while.”

The Journal's Emily Niebrugge contributed to this report.

Contact Seth Tupper at

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Enterprise reporter for the Rapid City Journal.