Budget Negotiations Over 'Big Three' Still Underway

Mar 8, 2018

Credit SDPB

Budget negotiations are ongoing with state lawmakers, who only have two days left of session.
 
The final budget is still a moving target, especially funding for state employees, education and Medicaid providers.
 
Lawmakers expect those three groups to see a slight increase in funding, but just how much remains is anyone’s guess.
 
Cover session and you’re bound to hear an anecdote about how lawmaking is like confecting a bratwurst. According to State Senator Deb Peters, the same can be said for drafting state budgets.
 
“It’s a lot like making sausage, it’s never pretty,” Peters says. “In the end, ultimately, by the end of the week it’s going to be something everyone can fully expect to be taken care of.”
 
The last week of legislative session is solely devoted to crafting the state budget. Lawmakers gavel in and tie up any loose ends. They can also go into conference committee over a bill that each respective chamber has amended. That’s when a delegation from the house and senate meet to hash out any differences over a bill--all while patiently waiting for a final budget draft. Peters says that’s getting debated by the legislative and executive branches.
 
“At this point now it’s between all the different levels of leadership and the governor. It’s negotiations, and that stuff doesn’t usually end up public,” Peters says. “Usually it’s, ‘My caucus will only do X, the other caucus is at Y, and governor you’re already at Z,’ and then how do you get those three to come together? And that’s where we’re at right now.”

Most of the negotiations taking place are about the big three--education, community-based providers and state employees.

Republican State Senator Larry Tidemann chairs the Senate Appropriations Committee. He says besides those three, most of the fiscal year 2019 budget is set.

“We will finish the rest of the budget setting for the agencies that we haven’t had before us, social services, the Department of Education, finish up the Board of Regents and some of the other ones that have impacts from either some bills that are out there or haven’t been decided yet,” Tidemann says.

Tidemann says leadership must decide what group of the big three will receive what funding before the appropriations committee can come together to craft the remainder of the budget.

Because of lower than expected revenues last year, lawmakers coalesced around giving education and community health providers each a .3 percent increase in funding.

Mary McCorkle is president of the South Dakota Education Association, an education faculty union in the state. She says in order for schools to remain competitive in attracting and keeping good teachers, the state needs to continue funding for education at least at the rate of inflation.
 
“If we are below the inflationary [rate] we will continue to move, but as other states around us move more, then we become somewhat stagnant,” McCorkle says. “ We don’t want to be back in the place where we were a number of years ago. So, it’s really important that we do the best job we can and continue to move forward.”
 
McCorkle says securing that increase could be challenging. She points to the governor’s budget address in December when he called for a tight budget going forward.
 
During similar negotiations last year, when lawmakers doled out a .3 percent increase to education and providers, state employees received money to help cover their health plan.
 
Eric Ollila is with the South Dakota State Employees Organization, which advocates on behalf of state workers. He says they didn't get a pay raise.
 
“The legislators seemed to believe they were giving state employees a .3 percent boost, but in actuality what they did is they only covered .3 percent of the state health plan shortfall,” Ollila says. “So, then it left state employees with a zero raise across the board and an extra $3.5 million in healthcare costs they had to cover.”
 
Ollila worked with lawmakers to pass Senate Bill 177, which ties state worker pay to the consumer price index. The bill failed.
 
He says state worker’s can’t go another year without a bump up in pay.
 
“Compensation increase, though, is necessary. Cost of living has gone up,” Ollila says. “State employees haven’t had a raise in over a year. So, we feel the time is--it’s needed. It’s a necessity at this point.”
 
The final budget negotiations this week have gone on without input from Democrats. State Senator Billie Sutton says that lack of input from a different party has pitted in-fighting between chambers. He says that’s not an efficient and functional process.
 
“You have one faction of folks making decisions without the input of a whole group of people. Let’s also not forget that the breakdown in South Dakota is around 46-47 percent Republican and the rest are Independents and Democrats,” Suttons says. “So, the majority of South Dakota is not the party that is reigning up here . So, to have no input from the minority party or independents, for that matter, also, is problematic, I think, to the process.”  

In addition to negotiating funding levels for state workers, community based providers and education, lawmakers are also tying legislator pay to the median household income in South Dakota. That initial bump up in pay will cost the state roughly $655,000. They’re also working on funding for a precision Ag building project.
 
Several state lawmakers and officials say state employees, education and community based providers will likely receive an increase in funding.
 
Just how much is up to the state’s legislative salumists.