PIERRE, S.D. (MITCHELLNOW)  We finished the final week of this year’s Legislative Session.

As always, the final week of session is a flurry of activity, especially in the Joint Committee on Appropriations. This week we finished budget setting for Bureau of Finance and Management, Department of Education, Board of Technical Education, Department of Health, Department of Social Services, Department of Human Services, Governor’s Office of Economic Development, Department of Labor and Regulation, Department of Corrections, Board of Regents, and State Treasurer. These agencies, in addition to those completed last week were rolled up into FY 2025 General Appropriations Bill, HB1259.   In addition, we finalized and passed SB52 which appropriates one-time dollars from the FY2024 budget which result from reversions from agencies and additional revenues.  This year we saw a large increase in unclaimed property receipts which fueled the revenue increase.  We aren’t expecting that in future years.

SB52 provided additional funds for a variety needs. Some of the major items we were able to fund this year:

  • Moving $132m into the incarceration construction fund. The $132m included $10m in ARPA funds, $93.6m was moved from the budget reserve fund with the balance of $25m from FY 2024 general funds.
  • $10m for grants to airports
  • $6m grant to children’s health services.
  • $7m for cybersecurity for local governments
  • $6m to construct the State Fair sheep barn.
  • And many smaller items.

The Joint Committee on Appropriations is responsible to structure the bill and deliver to both Chambers.  Both Chambers approved SB52.

HB1259, FY2025 budget is much harder to draft as we look 15 months into the future to estimate FY2025 revenue and hear budget testimony from all 47 agencies. Agency testimony along with the Governor’s proposed budget for each agency is heard, analyzed, presented to our caucus for their input and then rolled into a FY2025 structured balanced budget.  Not everyone gets what they want, but each agency’s needs were adequately covered. High lights this year include but are not limited to:

  • Governors recommended 4% increase for the big 3 which include teachers, Medicaid providers and State employees.
  • Tuition and fees were frozen at our technical colleges and public universities.
  • Medicaid coverage for nursing homes, assisted living centers, mental health providers, substance abuse centers, independent living centers, mental health providers, psychiatric treatment and therapeutic foster care was increased to 98% of cost. This was in addition to the Governor’s recommendation of 4%.
  • We created and funded a commission and office of indigent legal services which will help our counties with their funding shortfalls as well as providing acceptable legal council to the indigent.

South Dakota’s Constitution mandates a balanced budget.  South Dakota’s budget line items have little flexibility.  What are the major components of our States budget?

  • Education consumes 46% of our revenue.
  • Taking care of people that cannot take care of themselves necessitates 38%
  • Protecting the public requires 10%
  • Supporting 10 departments, 4 bureaus, the Governor’s office, 5 Constitutional Offices and the Legislature uses the balance of 6%.

I have shared in the past my concern with the economic future of South Dakota.  We have good and strong guard rails that require a balanced budget each year.  However, our budget has little flexibility.

South Dakota is very dependent on federal funding.  South Dakota’s total budget is $7.3B of which $3.5B is Federal Funds and $1.6B in other funds which are fees collected for a variety of services.   I believe there is a good chance that the Federal Government will be forced to cut back spending given the level of debt in proportion to our Gross National Product (GNP).  I hope I’m wrong.

The Joint Committee on Appropriations will continue to meet throughout the off season to monitor the financial health of our great State.  It is the only committee with year-round responsibilities.  This 18 member committee takes this responsibility seriously.

It is an honor to serve as your District 20 Representative. Thank you for the opportunity.

District 20 Representative Lance Koth