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Lawmakers fund Big Three at different rates for FY24

South Dakota House
Lee Strubinger
South Dakota House

The fiscal year 2024 state budget will break with a long-standing tradition—equal funding increases for the Big Three.

While Gov. Kristi Noem approved the budget earlier this week, she said deviation from the norm sets a bad precedent.

Typically, lawmakers give identical inflationary increases to education, community support providers and state employee salaries. Funding these sectors are constitutional obligations.

This year, state lawmakers are giving seven percent increases to education and state employee salaries while giving five percent to providers. However, lawmakers are giving targeted increases to many providers and fund long-term care and Medicaid providers at 100 percent methodology.

The state has seen nearly a dozen nursing homes close in the last year. These increases are part of an effort to stave off those closures.

Rep. Tony Venhuizen is a former chief of staff to both Noem and former Gov. Dennis Daugaard. He said he’s generally in favor of keeping big three funding tied together, but lawmakers had a chance to fully fund the healthcare priority.

“The governor, she got us heading on the right track here,” Venhuizen said. “She did the work of identifying those provider groups—including nursing homes, including community support providers—and doing the work to show how to get them to 90 percent. What the legislature did was build on that with those same groups.”

Venhuizen said of the total dollars going to inflationary increases, providers came out on top. Lawmakers were able to do that in part because of rosier-than-anticipated revenue collection targets set in February.

For decades, lawmakers have increased the funding for the big three at equal rates. They did deviate from that in 2016 for targeted increases for teachers’ salaries.

"While I understand the motivation behind this change, this sets a bad precedent and risks one or more groups being left behind in future years," Noem said in a statement. "I hope that the legislature will return to this longstanding tradition next year."

The Fiscal Year ‘24 budget will go into effect on July 1.

SDPB employees are state employees and subject to salary increases.

Lee Strubinger is SDPB’s Rapid City-based news and political reporter. A former reporter for Fort Lupton Press (CO) and Colorado Public Radio, Lee holds a master’s in public affairs reporting from the University of Illinois-Springfield.