Budget: Tech fellows saved; BOR sees $4.3 million cut


Staff And Wire Reports

South Dakota lawmakers passed a budget late on March 30 that could prove to be a mixed bag for students.

While some programs got restored funding, others, including the state’s entire university system, took cuts that could hit students’ pocketbooks in the fall.

The Legislature voted along party lines to use a combination of spending cuts and one-time transfers from various accounts to balance next year’s state budget.

The Legislature’s Joint Appropriations Committee approved the spending plan after meeting for nearly eight hours. The Senate then passed the budget 20-14 and the House passed it 44-25 to end this year’s legislative session at around 11 p.m.

Members of the Republican majority voted to pass the spending measure after praising it as a fair way to balance the budget by making most state agencies share in cuts.

“We would all like to give more money to everybody, but we don’t have it to give,” said House Appropriations Chair Larry Tidemann, R-Brookings.

Democrats criticized the budget bill, arguing the cuts will hurt schools, cause tuition increases for university students and threaten services in facilities for developmentally disabled people.

“My frustration this year is probably the highest it’s ever been,” said Democratic Rep. Paul Dennert of Columbia, who has been on the Appropriations Committee for 14 years.

The budget compromise was reached after Gov. Mike Rounds met on March 29 with the House and Senate chairs of the Joint Appropriations Committee, House Speaker Tim Rave and Senate President Pro Tem Bob Gray.

“Nobody will be real happy with all of it,” the Republican governor said. “At the same time I think we accomplished the goal of passing a general bill for next year that will take care of basic needs.”

One of the bill’s largest reductions is a $4.3 million cut to be spread across the six state-run universities.

“This will mean higher tuition and fees than what we had planned,” said Monte Kramer, vice president of administration for the Board of Regents, which runs the university system.

Other university programs were saved, however. The South Dakota Opportunity Scholarship, which was facing a $2 million cut, will be fully funded next year, and legislators only cut $270,000 from the University Technology Fellowship program.

That leaves the program with $500,000 to pursue its goal of sparking students’ interest in technology by having these students assist the university with technology-related projects.

Eric Haiar, state and local chair for the Students’ Association, said the Opportunity Scholarship and technology fellowship cuts were among the most concerning to him, and so he was glad that money was restored to those programs.

“Since those went through, we’re very comfortable with that,” he said.

The appropriations committee also restored partial funding to the Agricultural Experiment Station and the Cooperative Extension Service. The experiment station was facing a $500,000 reduction but legislators agreed to a $300,000 cut, while the extension service is now facing a $200,000 cut instead of a $400,000 one, Haiar said.

As for a planned new doctorate program in physics, lawmakers saved nearly $1 million by scrapping that project.

“Their view on that seemed to be that they were cutting a program that had not even started yet,” Haiar said. “They viewed it as an OK cut because it had not started.”

The Legislature had to fix an approximately $43 million gap between expected ongoing revenue and ongoing spending in the budget year that begins July 1. That’s a relatively small portion of the total $1.2 billion portion of the budget that spends state general funds.

About $14 million was gained by reducing the size of tax refunds given to large construction projects, and another $6.4 million in state spending was saved by increased federal payments for people who are in both the Medicare and Medicaid programs.

The Appropriations Committee on March 30 approved $19 million in spending cuts and the one-time transfer of $3.6 million from various accounts to help pay for general fund spending.In spending reductions, the panel cut $1.4 million, or about half the increase the governor had recommended, for the state’s four technical institutes. That also could cause an increase in student fees and could limit enrollment in some courses, lawmakers said.

Another $4.2 million in spending was cut from the Medicaid budget after state Social Services Secretary Deb Bowman said the number of new people signing up for the program has slowed in recent months. The federal government pays about two-thirds of the cost of the program, which covers the medical costs of poor people, with the state paying the other one-third.

Increases in Medicaid spending accounted for nearly all the spending increases the governor had recommended for next year. Bowman said the program gained 600 to 800 people a month last year because of the recession, but growth has slowed to between 300 and 350 people a month recently.

An extra $3.1 million was gained because of changes in calculations of state aid to school districts. A law was changed on how to calculate special payments to growing school districts, and some extra money was carried over from last year to this year.

In addition, the committee cut $1.5 million from a Health Department program that tries to prevent young people from starting to smoke and helps smokers quit. That move freed up $1.5 million to fund other programs.

Members of the Republican majority had pledged to balance the budget without using reserve funds because they believe those reserves might be needed a year from now, when the state’s budget problems could be much worse.

The governor originally had recommended using reserves, but agreed to spending cuts and other measures in the compromise. Rounds also insisted that if lawmakers cut spending, they should trim specific programs rather than approving across-the-board cuts that would leave it up to agencies to decide where to trim spending.

The Legislature delayed passing a budget two weeks ago because of uncertainty about whether Congress will provide the state with an extra $28 million to $34 million next year to pay for Medicaid. Rounds said if Congress later provides that extra money, a special session of the Legislature might be needed to reverse some of the spending cuts.