New Year, New Budget

Nick Lowrey

The next fiscal year could  a few rays of hope for state employees and some businesses running short of certain employees.

If the governor’s budget proposal is passed into law this winter, state employees would see a three percent ongoing  cost of living pay raise. They would also see a one-time five percent “offset” to make up for the buying power lost during the last few years without similar raises.

Businesses also have reason to applaud Daugaard’s plans, which call for investments into South Dakota’s work force. According to Daugaard, the state is running critically short of several key types of employees. Medicine, Engineering and the skilled trades are three of the areas Daugaard wants to focus on.

According to the budget proposal, all state employees will receive three percent cost of living pay increases. However, under state law, Board of Regents faculty and exempt staff are actually barred from receiving that type of pay increase. So faculty, who fall under a separate pay system, will be subject to additional requirements before getting a raise.

Another issue for faculty is the one time, five percent off set being given to state employees to make up for inflation that occurred during the last few years. According to Monte Kramer, the BOR Vice President of Finance and Administration, there won’t be a problem.“Faculty will most definitely be eligible for the bonus,” he said.

SDSU professor and president of the Council on Higher Education, Gary Aguiar, confirmed that faculty would be eligible for the offset. However, he added that the BOR budget remains, “very tight, very thin”.

Under Daugaard’s budget proposal the BOR will receive an additional $16.6 million from the state’s general fund over last year. That includes $10.6 million to replace last year’s one-time funding from the American Recovery and Reinvestment Act. According to Kramer, without the $10 million the BOR budget would be around one percent above last year’s budget.“The board is very pleased our requests were met and that the state made up the $10 million in stimulus funds,” Kramer said.

The rest of that money is slated to go toward several BOR initiatives, including an enlargement of the University of South Dakota’s Sanford School of Medicine. A rural medical track will be created and four new medical student slots will be added to the school as well.

Another part of Daugaard’s plans for next year are the funding requests for South Dakota WINS, a workforce initiative designed to increase the number of people in the state who work in several key fields. According to Daugaard, SD is facing a shortage of engineers, accountants, rural doctors, and workers in the skilled trades.

SD WINS will be used to attract workers in these fields to come from around the country to work in SD. A combination of out of state recruiting efforts and education initiatives will be used to reduce the shortage of workers in these areas.

Daugaard’s budget proposal comes just one year after a 10 percent budget cut. The cut reset state spending levels and caused the reorganization of many state agencies. According to the budget proposal for FY 2013, the state will now be able to restart funding key areas on an ongoing basis.

In addition to higher education and state employees, Daugaard has proposed ongoing funding increases in Medicaid reimbursement rates as well as K-12 education assistance. Daugaard has also asked to use $14 million of state reserve funds to pay for the costs incurred by the state during last year’s flooding. He asked for another $6 million of reserve funds to fight the Mountain Pine Beetle outbreak in the Black Hills.