SIOUX FALLS, S.D. — An organization that aims to help students attend private schools as part of a state-backed scholarship program has received a $150,000 donation, the first contribution under South Dakota’s new school choice law.
Des Moines, Iowa-based insurance holding company Sammons Financial Group Inc. said earlier this month it had provided the donation to Great Plains Education Foundation Inc., an Aberdeen, South Dakota, organization registered with the state to provide the private-school scholarships to K-12 students.
“We know our donation stays local and gives parents in South Dakota more choice in their children’s education,” Rob TeKolste, president of Sammons Financial Group’s Shared Services division in Sioux Falls, said in a statement.
The law, which was approved this year over the protests of public education advocates, mimics other states’ programs by offering tax credits in exchange for donations to private-school scholarships.
Under the law, insurance companies can get an 80 percent tax credit for total contributions to a grant organization that provides the scholarships. The total amount of credits is capped at $2 million each budget year. Supporters say the tax credits target businesses that pay an insurance company tax in South Dakota because it is a stable source of revenue that shows consistent growth.
GOP state Sen. Phyllis Heineman, who sponsored the legislation, said in a statement that 200 students from across South Dakota will have “significant help” attending the school of their choice thanks to the donation.
Students under the South Dakota program will be eligible for the scholarships if their families the year before made up to 150 percent of the income standard used to qualify for free or reduced-price lunch, among other conditions.
Critics argue the state has an obligation to provide public education and that the law could unconstitutionally direct public funds to religious schools. They worry it could lay the groundwork for a larger program that would siphon a significant number of students and support from public schools in the future.