We finished day 8 of the 2024 Legislative session. Again, the bulk of my time is spent in Joint Appropriations where this week we heard from the Department of Social Services (DSS), Department of Human Services (DHS), Department of Tribal Relations, Unified Judicial System and Public Safety.
Did you know that total general fund revenue for FY2024 is forecasted to be $2.6 billion?
Did you know that education consumes 45% of our state’s revenue?
Did you know that Medicaid consumes 26% of our State’s revenue?
Did you know that DHS, DSS, DOH and State Institutions consume 13% of our State’s revenue?
Did you know that Corrections, SD Courts and Dept of Public Safety consume 10% of our State’s revenue?
Did you know that the balance of our State’s revenue (6%) supports the remaining 10 Agencies, 4 Bureaus, the Legislature, the Governor’s office and 5 constitutional offices?
South Dakota’s Constitution requires us to balance the budget which means we will not appropriate more dollars than what our revenue forecast predicts.
I hear often that our taxes are too high, and we need to shrink State Government. The question is, how do we do that? A little historical perspective. Looking back to 1995. State aid to public schools has increased 316 % to $715m, Medicaid 522% to $633m, public universities and tech schools 205% to $345m, health, human and social services 326% to $312m, protecting the public 346% to $242m and the remainder of state government 31% to $154m. The bulk of these increases result from taking care of those that cannot take care of themselves. Social Services and Human Services is for the most part outside of my wheelhouse. As you can image, after hearing dozens of hours of testimony from these department experts you will learn allot. I will let you in on some of the things I learned.
The South Dakota Department of Social Services is one of the state’s largest agencies with more than 1,500 employees serving from 43 different office locations across South Dakota. Their mission is to serve children, families, individuals, seniors and people with disabilities through some of the most difficult times in their lives with the safety net programming and services we have been tasked to provide.
Medicaid started in 1965 by President Johnson. Medicaid is funded jointly by the state and federal government. The federal government’s share of a state’s Medicaid expenditures is called the Federal Medical Assistance Percentage (FMAP). States must contribute the remaining portion to qualify for the federal funds. The FMAP is designed so that the federal government pays a larger portion of Medicaid costs in states with per capita incomes lower than the national average. South Dakota’s Medicaid share will increase to 46.45% from 44.58%. In December 2023, the number of South Dakotans enrolled in state medical services programs increased by 2,149 to 125,924. This budget line item will continue to increase as we encounter the full cost of Medicaid expansion.
The Department of Human Services is responsible for Developmental Disabilities, South Dakota Developmental Center, Long Term Services and Supports, Rehabilitation Services, Rehabilitation Service and Rehabilitation Center for the Blind.
In 2023, the legislature infused $116 million into reimbursement rates for targeted home and community-based providers. That funding allowed rates to be set at 100% of the targeted methodology rate. Provider groups received significant rate increases, ranging from 13% to 38%. Now a year later we find that providers will need an increase of 6.4% to 17.6% to bring reimbursement to an amount to cover their costs. As a side note, the Governor is recommending an across the board increase of 4%. How did we fall so far behind so quickly? INFLATION. When one does a deeper dive into health care inflation you find that it is substantially higher than the inflation numbers we hear on national news. This can be attributed in part to the lack of skilled workforce and the increased cost to bring in traveling nurses which on average will cost 287% more than non-traveling nurses.
Budgeting for increased cost, in and of itself is a heavy lift but must be accompanied with a long-term solution. There was a 2023 Study Committee on Sustainable Models for Long Term Care that met throughout the summer and fall of 2023. This study group spent countless hours taking testimony from industry experts. Coming from that study was HB 1017, which would adopt the psychology interjurisdictional licensure compact and HB 1012 which would adopt the interstate counseling licensure compact and revise educational requirements to comply with the compact. Both bills were heard on passed in the House but not without debate. Will this solve our problem. Likely not but I believe it is a good start in finding long term solutions.
Next week we will have budget hearings for the Board of Regents, Board of Technical Education, Department of Education, Department of Labor and Regulation. Education is 45% of our budget which compels us to be diligent in our budgeting efforts for education.
I’m reminded often of my limitations as your representative. I spent 4 decades in the banking world, have very limited experience in social services and human services. So….I’m very reliant on the experts in those fields, be it fellow legislators, agency leaders, constituents and lobbyists. Next week we will dig into education, giving me the opportunity and privilege of seeking out experts in the education field.
Thank you for the opportunity to serve as your Representative.