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State lawmakers approve $4.7B budget to cap 2018 session

March 9, 2018

PIERRE, S.D. (AP) — The South Dakota Legislature approved a roughly $4.7 billion state budget Friday that includes higher-than expected funding to education, Medicaid providers and state employees for the upcoming budget year.

The Senate voted 32-3 to pass the budget as the main part of the 2018 legislative session came to a close. Earlier Friday, the House voted 49-17 for the bill that sets state spending for the 2019 budget year, which begins July 1.

The Republican-controlled Legislature benefited from state tax collections projected to climb higher than Gov. Dennis Daugaard anticipated when he proposed his budget plan in December. The budget for the next fiscal year includes roughly $1.63 billion in general state spending, about $18 million above the governor’s proposal.

“We all know we came into this session thinking we had no money whatsoever,” said Rep. David Anderson, co-chair of the Joint Committee on Appropriations. “Fortunately, we were able to come up with a little money through some newfound growth in our economy.”

The approved budget includes a 1 percent increase for education, a 1.2 percent salary bump for state employees, and inflationary increases of 2 percent for community-based providers and 0.5 percent for other providers. Daugaard in December had proposed no inflationary education funding increases per student and leaving most state workers without raises for the second straight year.

Eric Ollila, executive director of the South Dakota State Employees Organization, said he hopes the raise has a positive effect on state employees.

“It’s far in excess of what the governor proposed originally, which was nothing,” Ollila said before the budget passed. “We’ve come a long way, and I think that state employees should be happy with what we’ve done this year.”

The budget calls for spending roughly $1.7 billion in federal funds and $1.4 billion in other state money such as highway funding. The Legislature focuses mostly on how to spend the roughly $1.6 billion portion of the budget financed with general state taxes.

Lawmakers also reshaped the current year’s budget to add roughly $35.5 million in new funding. That includes more than $8.7 million in one-time dollars to providers and a one-time $5.4 million payment for state aid to education. It also budgets more than $11.8 million to fill a hole in the state employee health plan that workers would have had to cover out of their own pockets. Ollila said he would like to see the Legislature study state employee compensation and the state health plan.

Mary McCorkle, president of the South Dakota Education Association, a teacher’s union, said educators are pleased they’re making progress.

“We continue to have concern about South Dakota being competitive with the neighboring states, being able to recruit and retain teachers for the students of South Dakota,” she said. “We’re moving forward. We’re not moving forward a lot.”

The 2018 session started Jan. 9. Legislators will come back to the Capitol on March 26 for the session’s final day to debate any vetoes that could come from Daugaard.

Tony Venhuizen, the governor’s chief of staff, said in an email that Daugaard is pleased that revenues improved enough for inflationary increases and to fund priorities like a major new precision agriculture facility at South Dakota State University and a state veterans cemetery in Sioux Falls.

House Democratic leader Spencer Hawley, who is facing term limits, urged lawmakers to start thinking long-term.

“At some point in time in the Legislature, we need to become visionaries,” Hawley said. “We need to not be ... dealing with the pennies of today. You need to start talking about what do you want to see South Dakota be 10, 20, 30 years from now.”

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