S.D. budget decision delayed until end of month


Community News Service

The South Dakota Legislature’s final day of the main run was not as final as usual.

Usually by the end of that day, no matter how long it goes into the evening, there is a budget adopted for the next fiscal year. Not so this year.

Democrats and Republicans agreed-no small feat for the session-to leave the budget in the Joint Appropriations Committee until legislators return at the end of the month to deal with the governor’s vetoes. This is because of the prospect of federal money coming to South Dakota in the form of unexpected help with Medicaid funding-up to $34 million in stimulus dollars. There also is $6.5 million in additional Medicaid funding that legislators already had agreed to include in the budget.

Gov. Mike Rounds, however, indicated Friday he had expected the money, reminding that in the budget his office had put together earlier he had indicated he planned to use state reserves for the budget until or if the federal stimulus money became available.

In the final week of the South Dakota Legislature, word was received that the United States Senate approved additional Medicaid relief for states, or $28 to 34 million for South Dakota. Rounds said that still must be approved by the U.S. House, but it was his understanding that it would be approved by that body because it previously had indicated its approval-and one provision of the bill would renew unemployment benefits set to expire the end of March.

Rounds said that this past year the state’s share of Medicaid funding had increased by $50 million.

“This money (from the federal government) cannot be banked,” said Rounds, adding, “it has to be used in such a fashion that we balance our budget.” That is why, he said, that originally he had proposed using money from the state’s rainy day funds.

Democrats had proposed cutting the state budget by a series of across the board cuts, cutting so-called phantom full-time equivalent employees, both executive and legislative branch travel, University Ph.D. in physics, and repeal of tax breaks on large projects, as well as savings on the Rapid City prison project, no-bid contract reforms, license plate delay, Washington lobbying and a cut in Legislative pay, totaling $46.6 million.

Republicans broke ranks with the Governor and also proposed cutting the budget, instead of using reserve funds. Their proposed cuts totaled $48.6 million. Their cuts differed some in dollar amounts, but did not include the prison project, no-bid contract reforms, license plates, Washington lobbying or cuts in legislative pay. Instead, they had suggested chopping almost $15 million in such things as smoking prevention, certain educational programs, SDSU Co-op Extension Services, and State Fair.

Even though every bill the Democrats proposed to carry out their budget cuts was defeated during the session, on the last day leaders Sen. Scott Heidepriem, Sioux Falls, and Rep. Bernie Hunhoff, Yankton, still maintained their wish to see the cuts made. If it jeopardized the state being eligible for the Medicare windfall, so be it.

“If the choice is between the two,” said Heidepriem, “it is more important to make the cuts” to bring state government under control.

One of the proposed Republican cuts–$3.5 million to the K-12 school formula–just came true that day, said Heidepriem. Both the House and Senate approved, largely on party lines, flat-lining the current education funding.

Hunhoff said he found it “amazing” that earlier in the week the House had approved $38 million in tax credits to pipelines, but a mere 10 minutes later couldn’t afford $4.4 million slated for schools.

Republican House Leader Bob Faehn, Watertown, said their budget plan would come in three phases, making the cuts the first year, using reserve funds the second year, and hoping that in the third year that the economy had rallied.

Legislators return to Pierre March 29, intending to settle the budget question and end the 2010 legislative session.