Lawmakers cap session with $5.1 billion budget approval

March 12, 2021 GMT

PIERRE, S.D. (AP) — South Dakota lawmakers put a cap on the state budget Thursday by boosting pay for teachers, state employees and community support providers, as well as sending millions of dollars to infrastructure projects and a college scholarship fund.

In one of their final acts of this year’s legislative session, lawmakers passed a $5.1 billion budget that will take effect beginning in July. It included a 2.4% increase in salary funding for “the big three” — the nickname lawmakers have for teachers, state employees and employees of health care programs that depend on government funding.


House Republican leader Kent Peterson said lawmakers recognized they had an opportunity to address what he called a staffing “crisis” for government-funded programs for the elderly and people with disabilities. Employees of those programs currently get paid an average of $13 an hour, according to Rep. Chris Karr, who helped oversee the budget-making process. He said that pay should increase by $2.94 an hour with an additional boost in funding.

Sen. Jean Hunhoff, the Republican who co-chaired the committee that ironed out the budget, said lawmakers were focused on employees this year.

“It’s people that are important to South Dakota,” she said.

But lawmakers have also sent hundreds of millions of dollars to projects. They spent $100 million on expanding broadband internet access, $20 million to repair a railroad line from Fort Pierre to Rapid City, $12 million to build an events center at the state fairgrounds and $20 million for a new facility at South Dakota State University that would research how to turn crops into new products.

“We’ve probably done more big things this year than maybe ever in the history of South Dakota,” said Senate Republican leader Gary Cammack.

How did Republicans who normally pride themselves on thriftiness become big spenders this year? Billions of dollars have flowed into the state from the federal government, creating a boost in sales tax and giving the state the ability to offset expenses with federal relief funds sent directly to the state government.

With more federal money on the way, some Democrats argued the state should have been even more aggressive in spending money. Democratic Sen. Reynold Nesiba said that Republicans were being too cautious in adopting a revenue projection that was $52 million lower than what the Legislature’s nonpartisan economic analysts recommended.


He also pointed out that an additional $15 million dollars was set aside from ongoing expenses by Republican leadership after they met with Gov. Krist Noem’s office. This would allow the governor “to have first dibs on the millions of one-time funds” created if tax revenue is better than projected, Nesiba said.

“Some of the most important decisions continue to be made on the budget behind closed doors,” he said.

Noem has preached caution to lawmakers this year, warning that she thinks the state’s economy faces uncertainty under President Joe Biden.

“I was proud of the Legislature, that they’re willing to put more money into trust funds, and that they recognize the need to put money into reserves as well, not really knowing what the economy will look like in the next two or three years,” she said.

Some lawmakers had also questioned what kind of airplane the Department of Transportation will be purchasing with the $5 million the governor requested, but they granted that request as well.

However, as lawmakers made farewell speeches, politics were briefly put aside in the spirit of bipartisanship. Several legislative leaders pointed to the $50 million they will send towards an endowment for need-based college scholarships — dubbed the Freedom Scholarship — as something that nearly everyone agreed would benefit the state for many years to come.

“We invested in our kids,” Noem said. “Getting that Freedom Scholarship set up was a big deal.”