Zimmer, Duncan & Cole

All's Fair in Kids and Money

Two recent cases decided by our state Supreme Court involve a common thread: kids and money.  In the first, a teacher’s union and school district haggle over salaries.  In the second, a mother and father dispute the correct amount of child support. The opinions are called AFCSME Local 1025 v. Sioux Falls School District (2011 S.D. 76) and Linge v. Meyerink (2011 S.D. 78). 

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In South Dakota, education funding comes from several sources, but revolves primarily around the per-pupil “State Rate.” That figure was set by the Legislature in 1995 and it increases annually by at least 3%.  Each district is allotted the State Rate multiplied by the number of students enrolled.  (Smaller districts get a little more.)  Educator salaries in Sioux Falls are tied to the State Rate:  the teachers’ contract specifies that their wages will increase each year by the same percentage as the increase to the State Rate.

In 2008, however, things got complicated when the Legislature announced two, different increases. Any district that promised to raise teacher salaries by 3%, was entitled to a 3% increase in per-pupil funding, but for all other districts, the State Rate would increase by 2.5%. In order to take advantage of the 3% funding increase, the Sioux Falls School District promised the State that it would be giving 3% raises to its teachers. However, after making that commitment, the District then adopted a budget with only 2.5% raises. The teachers’ union challenged this decision in court.

In its defense, the District argued, first, that the teacher’s union missed the 30-day deadline for protesting this issue.  The District also advanced a rather convoluted theory as to why it could benefit from a 3% increase in the per-pupil rate, but only give its teachers a 2.5% pay bump.

The Supreme Court rejected both of its arguments, and the teachers will get their raises (although almost three years after earning them). 

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Our Court’s other recent case involves the rules relating to child support.

Linda Linge and Steven Meyerink were married in 1989 and divorced 11 years later.  Linda retained custody of their two children.  Steven has dutifully paid child support ever since. In 2010, Linda filed a petition to modify Steven’s monthly child support obligation, which had remained at $515 for almost a decade. 

Child support modifications are heard by a referee, (usually an attorney), appointed by the court to take the parties’ testimony, review their financial records, and then make a recommendation with a proposed amount. Almost all child support cases are decided based on a very straightforward formula:  the wages of both parties are plugged in; some deductions are made for expenses like retirement contributions; and the result is the amount owed in child support.

Using the formula, the referee determined that Steven’s new obligation should be $749 per month. However, the referee also learned that Steven’s current wife suffers from a very serious medical condition.  She is unable to work and is on permanent Social Security disability benefits. Steven has struggled to stay afloat.  Each month, at least $500 of her medical bills are not covered by insurance.  He also incurs substantial expenses to travel with his wife to California for treatment. As a result, Steven has accumulated $60,000 in new debt; refinanced his mortgage to an interest-only loan; borrowed money on credit cards; and taken out a new loan on his used pickup. Based on these circumstances, the referee lowered his new obligation from $749 per month to $449 per month.   

Steven’s ex-wife disagreed, noting that this was even less than he was already paying.  She appealed the decision into Circuit Court, and then to the Supreme Court.

 Both courts upheld the referee’s decision to reduce the child support obligation.  The referee had relied on an exception that allows a deviation from the standard formula if using it would be “inequitable”. Here, the courts agreed that Steven’s dire financial condition was a valid reason to use the deviation rule and reduce his child support obligation.

If you’re paying or receiving child support, I encourage you to use the state’s online calculator to see if your current payments are in line with the formula. Go to dss.sd.gov and click on the “Child Support” link.  But keep in mind that each case is unique, so the result is only an estimate.