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Lawmakers, SDEA React To Budget Plan

SD State Capitol, Winter 2012
Cara Hetland
SD State Capitol

Leaders react to the latest numbers regarding South Dakota’s current budget and the plan for the upcoming fiscal year. Governor Dennis Daugaard spent an hour and a half Tuesday hashing out his perspective of the state’s financial priorities.

Governor Dennis Daugaard’s budget for fiscal year 2014 is now public knowledge, but advocates for certain sectors of state funding have trouble looking past cuts that the state implemented two years ago. That’s when Daugaard proposed across-the-board ten percent reductions. He says back-filling previous cuts isn’t an effective philosophy.

"Well the schools ultimately felt the least cut of all. K-12 ended up feeling a cut of about 8.6 percent, not ten. Whereas all the state agencies bore a 10 percent cut, the Board of Regents took a ten percent cut, all the Medicaid providers took a ten percent cut, by K-12 took 8.6, so, by that line of thinking, they should be at the end of the line in terms of restoration," Daugaard says. 

Daugaard is quick to point out that isn’t his proposal; the fiscal year 2014 budget includes a three percent increase for K-12 education. State Senator Corey Brown of Gettysburg says lawmakers have to look forward from the new normal.

"The governor and I think many of us legislators were pretty clear that two years ago was intended to be a reset. There should not be the expectation that we’re necessarily going to fill those cuts back in because," Brown says. "Now if there are programs that make sense and clearly there’s a return on that investment, I do think as revenues increase, we will continue to put more money towards things."

The Republican Appropriations chair says current projections for expenses and revenues in the Governor’s budget leave little ongoing money left after devoting that three-percent increase to education. He points out that voters shot down a sales tax increase that would have benefited education and Medicaid.  Brown says that shows him South Dakotans don’t support massive increases to the programs, but he says some additional funding may be reasonable and necessary.

Sandy Arsenault is President of the South Dakota Education Association.  She says she's encouraged that the proposed budget follows the law by increasing funding for education.

"Our question isn’t whether or not we’re starting from the reset," Arsenault says. "Our question is, how are we going to put back the programs that were cut, the opportunities that were lost, the staff that was let go? All those things hurt our education system and hurt our children."

Arsenault says it’s difficult to determine how much money schools would need to establish new programs now that districts have adjusted following the funding cuts. She’s grateful the SDEA is lobbying for increased funding instead of fighting against cuts.

For 2014, Governor Daugaard presents a budget that shows one-time money hitting the state’s books. Those are funds that aren’t generated every year. He utilizes one-time money to fill in some gaps in the current budget as property tax revenues dip lower than expected. He also suggests other uses for the one-time funds.

Returning Representative Peggy Gibson of Huron isn’t shy about opposing the governor’s policies, but the Democrat supports Daugaard’s vision for those dollars.

"The corrections program is very good. The state park improvements, money going to the South Dakota State Fair impacts Huron and my community and authorizing funds there, so I’m very appreciative of those," Gibson says. "Tackling the pine beetle problem, the Ph.D. Physics degree. I’m very, very pleased with some of those one-time fund monies and agree that they need to be done."

Despite a budget of more than $4 billion, the governor’s proposal doesn’t divvy up all of the state’s revenues. He leaves $16 million unspent in this year’s budget and $10 million on the fiscal year 2014 ledger. Daugaard says that financial wiggle room helps ease the challenge of potential federal funding issues.

"Secondly I think, when you have one-time money, I will have some thoughts and ideas on how money should be spent, but I think I’m not out in the entire state in some districts," Daugaard says. "Those Senators and Representatives, they have ideas, too, so they should haven’t to swim upstream against my proposals."

The governor says he also isn’t suggesting lawmakers spend or save those small surpluses; he’s leaving that decision to the legislative body. Representative Tom Jones returns to the Statehouse in January as Senator Jones. The Democrat says one of his priorities is to examine the best option for those excess dollars: transitioning them to reserves or spending the money on important programs.

"Well, I think the biggest thing that I’ll be probably looking at is, what are we going to do, are we going to do anything with the reserve cash funds? How much money do we have to store away that we do nothing but gain interest on when we have so many people that are needing help in critical areas?" Jones asks. 

One focus of state government largely untouched in Governor Daugaard’s budget address is economic development. Republican State Senator Mark Johnston of Sioux Falls says he looks for a greater focus on business and jobs.

"There was some acknowledgement of economic development in this budget. I don’t necessarily believe that maybe there was enough," Johnston says. "I was just doing some rough math in the back, and about 71-72 percent of all the increases that we saw today are really enveloped in two places: taking care of people and education."

Lawmakers tackle economic development and a host of the state’s other priorities when they return next year. The 2013 legislative session convenes January 8th.