Most of my time is in Joint and House Appropriation committees as well as two work groups.

This week we completed budget hearings for the Board of Regents, USD, USD Law School, USD Medical School, DSU, NSU, BHSU, School of Mines, our four University Development Centers, Tech Colleges and DOE as well as budget setting for the Governor’s office, PUC and Veteran Benefits and Services.

The responsibility for drafting the general fund bill (GBill) this year rests in the House. As such, we are tracking our budget setting process on our “roadmap”, a mechanism that will assure us that on-going spending will not exceed projected revenue. We are also tracking bills that have been introduced for one-time needs. At this time, we would have a deficit of $128m should all one-time spending bills be approved. This can’t happen as our State’s Constitution requires a structured balanced budget. Tough choices will be made.

One of the big spenders this year in one time money is the men’s prison as well as completing the women’s prison in Rapid City. Where would the money come from? Current data and estimates on the men’s prison is a cost of $706m. We have $351m set aside and earmarked for our prisons, there is $10m in Federal ARPA money available, excess reserve of $96m and an estimated FY2024 transfer of $132m. This would leave us short $138m. We have bonding capacity of $451m. The question is and will be, should we borrow or wait to pay cash?

Our Appropriations approach will continue in the same mode as last year. Before we approve or disapprove a bill having a fiscal impact our republican leadership will allow each caucus member to voice their opinion and to prioritize. Each Representative is encouraged and expected to seek the will of their constituents. Not everyone gets what they want as the majority must rule and we must move forward to balance the budget like was done last year in good fashion. I receive hundreds of emails and other communication from constituents regarding their priorities.

In addition to normal committee action, the Joint Appropriation Committee has created four work groups, two of which I serve on. One being to determine how the Executive branch decides what Federal grants to participate in and the other to study our State’s dependency on Federal funds.

One question we have is what if the Federal Government was forced to cut back on Federal subsidies? And can the federal government continue to fund at the level they are given the fact that our federal debt is now 124% of GNP? Compare that to South Dakota where the maximum debt statutory limitation is 1.2% of South Dakota’s GNP which at end of FY23 equates to $825m in allowable debt. Further research reveals that Federal Aid Per Capita in South Dakota is $10,923, up 22.44% from 2020 and ranked #20 in the US. Another metric that I believe is important is balance of payments which South Dakota ranks 47th in the US.

South Dakota receives more on-going federal money than we contribute the result in part due to SD being one of the lowest taxed states in the nation. We are a very conservative state but very dependent on federal dollars.

We will continue to focus on balancing the FY2025 budget, making every attempt to fund the needs of our citizens while keeping our long game in focus.

Thank you for the opportunity to serve as your District 20 Representative.

Representative Lance Koth