Gov. Kristi Noem wants to spend big on water projects and workforce housing, while giving state workers a 6-percent wage increase.
Noem outlined her spending priorities on Tuesday during her budget address for Fiscal Year 2023.
The governor is proposing a $5.7 billion budget, a $592 million increase from this year's budget.
South Dakota is expecting a slight decrease in revenue for the next fiscal year: $2.13 billion vs. $1.98 billion. However the state has seen a massive influx of federal dollars for COVID-19 relief.
The state usually puts 10% of its budget in reserves. Noem wants to increase that to 14% — about $300 million — due to uncertainties surrounding inflation, which she blamed on President Joe Biden.
Fiscal Year 2023 runs from July 1, 2022 through June 30, 2023.
Spending priorities
Noem said she wants to prioritize improvements to infrastructure, the workforce and public safety.
She proposed $660 million on water and sewer projects. With local and federal dollars, there could be about $1.5 billion in investments.
"With these efforts, we will be able to provide clean water for our communities for years to come, even as they grow and expand. And we will be able to ensure the continued success of our agriculture industry and new industries as they move into our state," Noem said.
The governor also wants to spend $200 million on workforce housing. Local governments and developers will pitch in for a total investment of $600 million.
"There has been a dramatic increase in new residents to our state." Noem said. "But new folks who are coming to South Dakota to fill those jobs are running into a problem. A tight housing market is making it difficult for them to find a place to live."
The workforce housing grants are not the same as government-subsidized housing for low-income residents. There will be no income, rent or mortgage limits.
"The goal is to incentivize the building of more housing in communities across the state in partnership with developers and local governments," said Noem spokesman Ian Fury.
The governor wants 6% increases in state worker pay and reimbursement rates for healthcare providers. Noem also wants 6% more in education funding that she hopes school boards will use for teacher raises.
Noem's pay raises would total more than $104 million.
"This 6% increase is unprecedented, but also necessary," Noem said. "Many of these positions in these three areas are not keeping pace with their counterparts in the private sector or other states."
The South Dakota Education Association, which represents teachers, praised the 6% education funding proposal.
The South Dakota State Employees Organization, which represents state workers, says it will keep an eye on whether wage hikes would be met with increased healthcare costs.
The compensation plan "notes no increase proposed for the 'employer paid' portion, but that does not at all rule out added costs on the employee side," the group wrote on Facebook.
Other budget items
Other funding proposals include:
- $100 million for new daycare centers to address the daycare shortage.
- $80.7 million to enhance and expand assisted living, home caregiving, case management, mental health, substance abuse and other Medicaid-funded home and community-based services.
- $69.6 million for a new state public health lab.
- $50 million to expand broadband.
- $35 million in tourism promotion.
- $30 million to expand cybersecurity programs at Dakota State University and launch the Governor’s Cyber Academy in every South Dakota high school.
- $29.5 million to demolish and replace a building at Northern State University.
- $28 million to build a new minimum/low-medium security women's prison. The Rapid City Community Work Center for Women would house 167 women currently at the overcrowded Pierre prison and make room for 41 more beds.
- $24 million to improve fire and ambulance services, especially in rural areas.
- $17 million for workforce training at technical colleges.
- $15 million to construct more regional behavioral health centers to treat people with mental health and substance abuse disorders.
- $10 million for 175 new campsites at Custer State Park.
- $8 million to address the nursing shortage by expanding a nursing education center in Rapid City. The building will allow for more students while consolidating programs currently housed at four locations.
- $6.5 million to repair the more than 80-year-old Richmond Dam near Aberdeen.
- $5.8 million to expand medical and dental areas at the women's prison complex in Pierre. The money would also create a new unit for prisoners with mental health needs, who are currently housed in the disciplinary unit.
- $5.6 million to repair public recreation areas damaged by the 2019 floods.
- $5 million for courthouse security.
- $3 million in one-time funding to help survivors of violent crimes.
- $2.6 million for Bright Start, a program that brings nurses to help parents with their infants and young children.
- $2.1 million in additional pay increases for Department of Corrections staff.
- $2 million for National Guard facilities
- A human trafficking state coordinator.
- A specialist to handle cold cases involving missing and murdered Native Americans.
- A Medicaid fraud data system.
- Modernizing the state IT system to keep citizen data safe and secure.
Budget documents can be viewed here.
