South Dakota schools, care providers, state workers get 1% increase under Rhoden's new budget
With revenues up, governor splits additional dollars between 'Big Three' & legislative priorities
PIERRE — Rosier-than-expected revenue projections have Gov. Larry Rhoden calling for a 1 percent increase in state funding for public education, Medicaid and state employees.
The Union Center rancher unveiled the proposal Thursday morning, one day after lawmakers on the Legislature’s Joint Committee on Appropriations boosted the state’s revenue estimates by nearly $50 million for the current and upcoming fiscal years.
Of that total, about $29.9 million is in ongoing revenue and $16.8 million is in one-time dollars, according to updated projections adopted Wednesday evening at the Capitol.
Rhoden’s 1 percent proposal for the so-called “big three” — education, health care and state employees — would use roughly $25 million of the additional ongoing revenue forecast by appropriators.
“When I presented my budget, nearly all of the ongoing dollars were spoken for by mandatory increases from the federal government. So we didn’t have anything left for the big three, which are education, health care, and state employees,” the governor told reporters at a morning press conference at the state Capitol.
The updated revenue projections came after newly released analysis by state economists under both the Governor’s Office and the Legislature. Each branch’s financial forecasters projected tens of millions more than anticipated when Rhoden first unveiled his proposed fiscal year 2027 budget in December.
Rhoden said across-the-board increases treat “the most important aspects of state government equally.”
On the one-time dollars, Rhoden stopped short of prescribing specific spending desires, instead leaving about $17 million more for the Legislature to prioritize.
“I hope the Legislature goes along with that,” he said, also noting about $14 million he’d initially proposed for legislative priorities. “They will obviously have a lot to say about that. And we look forward to working with them through the rest of the session.”
The additional $29.9 million in ongoing revenue eases some of the political and operational pressure behind proposed spending freezes and cuts in Rhoden’s original budget plan, which included no increase for the big three.
Ahead of the governor’s announcement, legislative leaders signaled they expected Rhoden to revisit those allocations.
Assistant House Majority Leader Marty Overweg told reporters Thursday morning he had hoped the Legislature and governor would use only a portion of the additional ongoing revenue for increases to the big three, potentially in the range of 1 percent or less.
Other legislative leaders might prefer directing all of the new ongoing dollars toward state workers, educators and community support providers (CSPs), which could have supported an increase closer to 1.25 percent.
“Certainly that’s something we’ll discuss in our caucus,” Senate Majority Leader Jim Mehlhaff said. “We’ll have to set some priorities to see what we’ll be working on with the House.”
House Minority Leader Erin Healy said she’d like to see all of the additional dollars and more go to teachers, state workers and CSPs.
“It’s a real chance to put people first,” the Sioux Falls Democrat said. “We can invest in public schools, protect access to healthcare, support working families, especially those working families that are state employees. I think it’s important because our budget needs to reflect our values.”
For now, Rhoden said he plans to leave further decisions on more granular spending details to lawmakers.
South Dakota ought to provide a state match for the kids' Trump accounts -- if South Dakota is pro-children, pro-families. Pony up. Or is it, all hat and no cattle?
Just once it would be nice if salaries kept up with inflation, but instead it keeps bubbling up to the people who already have more than enough and benefit the most from society.