South Dakota Governor Kristi L. Noem delivered her first budget address as the state's chief executive. Noem said in the weeks up to Wednesday's speech that there would be some differences in her plan versus the one laid out by former Governor Dennis Daugaard last month. Noem's address included a review of the current state budget and her proposal for Fiscal Year 2020.
State Employees
Governor Kristi Noem spent about a half-hour outlining her state budget proposal. Noem says one area she wants to highlight is increasing pay for state workers.
“State government is the largest employer within the borders of South Dakota. We employ the breadth of occupations, from groundskeeping to maintenance, civil and technology education engineering, medical and health care services, and leaders to make sure the government runs smoothly. It’s our responsibility to ensure that the state has the talent that it needs, to provide the essential services to taxpayers and citizens. Studies have repeatedly shown that the most state employees are paid well below the market rate.”
Former Governor Dennis Daugaard recommended a 2.3 percent increase for state employees in the next fiscal year. Noem is suggesting two-and-a-half percent. She says she also wants to keep workers from paying a premium for their individual health coverage.
“Pay and benefits are crucial to both, which is why I’m recommending one point seven million in general funds and not implementing the employee premium. With this one point seven million in general funds, we can leverage two point six million in federal and other funds, instead of placing the entire costs on individual employees.”
Noem suggests a two-and-a-half percent increase for caregivers, Medicaid providers, and state employees. Lawmakers will hammer out the budget for the rest of Fiscal Year 20-19 and craft a plan for the next fiscal year during the current session.
High-speed Internet
The Governor also discussed one of her primary goals – developing broadband internet services for people who currently don’t have access.
“We need faster connections to enhance the ways that our rural communities participate in the next generation for South Dakota’s economy. I highlighted the fact that there are many rural areas of our state where there’s a lack of access to broadband. Half our counties have areas where one in four people do not have this kind of service. In some counties, half of the residents don’t have broadband access at all.”
Noem says she already has agencies working to bridge the internet divide in South Dakota’s rural areas.
“State government is working out the gaps right now in our state, so we can figure out where to focus our resources. I’ve also charged my office of economic development with building public-private parternships to overcome the barriers. An important part of that process will be working with industry to discover present plans for future. They should not be used to subsidize investments already planned by providers.”
Noem’s budget proposal includes five million general fund dollars to spur rural broadband expansion in the state.
Medicaid and Nursing Homes
The Governor also proposes additional funds for South Dakota’s Medicaid providers. The State Association of Healthcare Organizations shows South Dakota has the lowest Medicaid reimbursement rate in the nation. Several nursing homes in the state are struggling to remain open under the current rate.
Governor Noem is proposing a 2.5 percent increase for Medicaid providers. She acknowledges the difficulties facing nursing homes and other long-term care facilities, but adds some people want to put more money into the same system and expect different results.
“And while my budget does include increases to provider reimbursement rates, I’m also proposing we put five million dollars in one-time funding to partner with providers to seek bigger picture solutions to challenges we face.”
Noem says the state should support facilities that want to offer alternatives to traditional nursing care, like community living homes or rate tiers for assisted living facilities.
She’s also directed the state Department of Health to review rules on assisted living centers to remove what she calls “unnecessary restrictions.”
Meanwhile, House Bill 1060 calls for eight million dollars of state aid to increase Medicaid reimbursement. That bill was introduced late last week and has not yet been heard in committee.
Response to Governor's Address
State Employees and education organizations are hopeful with Governor Kristi Noem’s first budget presentation.
In it, she calls for a point two percent increase in funding to both entities from what former Governor Dennis Daugaard’s recent budget recommendation.
SDPB’s Lee Strubinger has the story.
Governor Noem wants a market adjustment for all permanent state employees of 2.5 percent increase in compensation.
She’s also proposing ongoing general funds to pay for employee health insurance premiums. Then-Governor Daugaard called for state employees to pick up the tab on premiums, which would have also required a statute change.
Eric Ollila is the executive director of the South Dakota State Employees Organization.
He says they’re pleased to see the governor’s acknowledgement of the contribution of state employees.
“We know here at the capitol that state employees are involved in every aspect of the state,” Ollila says. “K-12, healthcare, all that stuff, state employees facilite that. It was nice to get that acknowledgement from Governor Noem. I can tell you the state employees that have already contacted me are happy with the proposal.”
Ollila says he wants state workers to walk away with at least the 2.5 percent market adjustment increase for permanent employees, as well as the ongoing 1.7 million dollars to eliminate the need for an employee health insurance premium.
Education funding is receiving a similar bump up in pay for state aid to k-12 and technical institutes.
Mary McCorkle is president of the South Dakota Education Association. She says it’s encouraging to see the governor’s 2.5 percent increase for education. Says it’s a good place to begin.
“It means more support for our students' educators,” McCorkle says. “It means retaining educators, it means enabling school districts to provide the things our students need. So, it’s good for our kids.”
Now that lawmakers know the governor’s priorities, appropriators will begin crafting a budget that meets both Noem’s and the legislature’s priorities. Lawmakers and the governor’s office will release anticipated revenue forecasts in the coming weeks, and revise the state’s budget from there.