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Gov Proposes 2 Percent Increases In Key Budget Areas

Cara Hetland SDPB

Governor Dennis Daugaard gave legislators and a state-wide audience his budget proposal for fiscal year 2016.  The governor admits it’s a cautious budget, and he says it has to be.  Daugaard says revenue amounts have not met projections this fiscal year, and his numbers for education and state workers are just above predicted inflation rates.

“I’ll be proposing a 2 percent increase in state aid to education, the technical institutes, providers and the state workforce.  I’m proposing a 2.3 percent increase in expenditures related to the Board of Regents total budget," says Daugaard.   

"Again, these increases are either higher than what inflation was, or what it is projected to be in the coming fiscal year.  So everybody should be able to gain a little ground on that basis,” he adds.

By law, South Dakota’s governor has to give public schools aid that at least matches the rate of inflation. 

But for some lawmakers a two-percent increase in state aid to K-12 schools is not enough to make up for the low teacher pay in the state.    They say the legislature needs to find a way to increase teacher salaries.   Governor Daugaard says special funding to increase teacher pay isn't available.

“There is really no additional money available.  We can’t spend money we don’t have.   Certainly I’m proud of the fact that we spend nearly half the budget on education,” says Daugaard.

You can hear more from SDPB's Charles Michael Ray below.

State Lawmakers now have about a month to dig into Governor  Daugaard’s budget proposal before the upcoming legislative session.  Besides the modest increases for K-12 Education and state worker salaries—Governor Daugaard is also proposing the elimination of one health care plan. 

South Dakota Public Broadcasting’s Gary Ellenbolt reports.


The Governor's budget address also includes a proposal to have the state insure its own buildings and equipment.  Governor Daugaard is suggesting nearly an annual premium of about $600-thousand  to self-insure state property.

 “Right now, the building we’re in is not insured.  Most of the buildings on this campus are not insured.  We are dependent on our emergency and disaster fund in case of a catastrophic loss," Says Daugaard.  

Daugaard says he does not believe state lawmakers have been irresponsible in failing to insuring state buildings.  But he says a better approach is for the state to create captive insurance companies.   

"One in the property-casualty arena, and one in the liability arena, and pay ourselves to insure our buildings.  This ongoing expense would be the premium we pay to ourselves, in these captive companies, and would allow us to have insurance, essentially, through these captives,” says Daugaard.

Daugaard says self-insurance allows state government to control premiums, since private companies can raise costs for disasters having nothing to do with South Dakota.  The State Legislature convenes in January to begin work on the Governor’s budget plan.

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