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Two days, $32 million later... Legislators approve slashed budget

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The South Dakota Legislature completed its work March 30 without having to cover the clock and go into the next day.

But it was a grueling two days, especially for members of the Joint Appropriations Committee, charged with cutting $32 million from the budget to avoid using reserve funds.

When legislators had returned home two weeks prior to await the governor's veto on the bills they had passed, hopes had been high that money would be available upon their return from certain federal recovery funds providing Medicaid dollars. The U.S. Senate had passed the bill, and it was presumed certain the House would also push the bill through. However, the question had not been finalized by the time legislators returned to Pierre March 29.

The task of cutting the budget began in earnest.

While Gov. Mike Rounds had sought to take the $32 million from reserve funds, both Democrats and Republicans had resisted that, insisting that cuts be made this year to try to ease an even-higher expected shortfall next year due to the nation's sluggish economy. While Republicans and Democrats each had their list of cuts, it was the majority party, the Republicans, who worked out a compromise with their governor. That list did not include across-the-board cuts, a concept that Rounds had opposed from the beginning.

An estimated $14.5 million already was expected from construction tax refunds that had been tightened up by 50 percent during the main run of the session. A $4.2 million windfall of sorts was presented to the Joint Appropriations Committee by the Department of Social Services. Department Secretary Deb Bowman said it had been found that Medicaid caseloads were not increasing as much as had been expected. She said that an increase of 600 to 800 cases per month had been projected, but it has turned out to be 300 to 350. Half of the $4.2 million came from the 2010 budget and the other half from the 2011 budget, she said.

Rep. Quinten Burg, D-Wessington Springs, expressed his frustration that information had not been shared earlier with the whole committee that this money was available. He added later that "somewhere there has not been an open dialogue on this appropriations bill."

He was assured that was not the case.

"If you think something is going on in a smoke-filled room," said Sen. Jeffrey Haverly, R-Rapid City, "that is not the case."

Bowman indicated that the figures had been run again by their statistician weeks prior when the governor had asked department heads to comb their budgets for any unused money. Those figures are produced monthly, she said.

"We all started looking," said Sen. Jean Hunhoff, R-Yankton, Joint Appropriations Chair. The Republicans met with the governor and hammered out a compromise in positions on budget cuts.

Education in general took a hit during the process, even though K-12 school funds were not actually cut. Instead they will not be receiving a 1.2 percent raise in per-pupil funding.

Regional Education Service Agencies were to receive a final $500,000, but that was cut. The Dakota Digital Network, which provides Internet and communication services to schools, lost $300,000.

Unused state aid--$2 million worth--will be carried over from 2010 to 2011. Another $1.1 million is expected to be saved in other school funding programs.

Tech schools and universities received cuts, slashing some programs. Tech schools have experienced increased enrollments due to displaced workers heading back for training. Rounds had proposed a $2.7 million increase to help with that enrollment increase, but the Legislature cut it to $1,348,000.

"This cut," said Haverly during the Appropriations hearing, "was conceived in the last 24 hours." He indicated the schools may have to limit enrollment in certain areas because of it.

Another $4.2 million was cut from the state university system. That includes a doctorate program in physics that had been sought by Rounds, costing $970,000, and $169,000 cut from the Electronic University Consortium.

Half a million dollars was cut from the Cooperative Extension Service and Agriculture Experiment Station programs. Another $200,000 will be saved from not funding two regional higher education organization memberships. And, $270,000 was cut from the technology fellows scholarship program, slicing out a third of it.

Sen. Daniel Ahlers, D-Dell Rapids, said he didn't support these additional cuts, since students end up paying more, increasing the pressure on them. Burg agreed, noting "with friends like this, you don't need many enemies."

The South Dakota School for the Deaf also lost $660,000.

State employees receive no raise in 2011 again. Medicaid providers also received no inflation increase.

The State Fair lost $100,000 in state funding.

Tobacco prevention and cessation programs took a $1.5 million hit, with the money going for other purposes. The money is part of the $5 million the state Department of Health receive for such programs.

The Unified Judicial System gave up $400,000, eliminating an increase that had been sought for replacement of the Meade County courthouse.

The budget passed the Senate 20-14, with Democrats, plus Republican Gordon Howie, Rapid City, opposing it.

In the House, a last-ditch effort was made by Democrat Paul Dennert, Columbia, offering an amendment that would have funded several things, including the $ 1.2 million increase for K-12 education, if the expected federal dollars come through. He said this would save having to return for a special session. The amendment was defeated 24-45, with Republican Bob Faehn, Watertown, noting it was "not the time or place to discussed money we don't have."

The bill went on to pass 44-25.



Copyright 2010 The Canistota Clipper, Canistota, South Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2010 The Canistota Clipper Canistota, South Dakota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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