Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Noem Proposal For State Employee Pay Increase Offset By Healthcare Change

Governor Kristi Noem

Governor Kristi Noem recommends a 2.4 percent salary increase for state employees and those in education and community health.

Noem is also suggesting some changes to the state employee health plan that some call ‘almost a non-starter.’

The 2.4 percent salary increase is a part of an annual inflationary bump in pay for state workers. The increase adds up to about $9.5 million dollars.

Recently, Governor Noem had the Bureau of Human Resources reassess state employee healthcare benefits. She wants benefits that are competitive with other large employers in the state. Noem also wants to make the plan financially stable.

In her budget address earlier this week, Noem announced a new, four-tier health plan that she says will save the state more than $12 million dollars.

“We will reinvest those funds directly into employee pay,” Noem says. “Especially for positions where the state’s base pay hasn’t offered competitive wages.”

The pay increase for state employees is welcome, but the executive director of the South Dakota State Employees Organization says it won’t make up for increases in health care costs. Eric Ollila says state employees will need to pick up the $12.5 million dollars the state saves in healthcare costs.

“It doesn’t really square for state employees to be paying $12.5 million more for their insurance and then for that to be construed as them increasing their salary somehow,” Ollila says. “So, on the surface, the 2.4 percent market adjustment is favorable, but the rest of the terms are not.”

Ollila says to make the plan favorable for employees, the state should pick up the health care costs the governor wants to shift to workers.

-Contact SDPB reporter Lee Strubinger by email.