PIERRE — Gov. Kristi Noem’s proposed budget would provide relief for local governments rebuilding their infrastructure after this year’s flooding and other disasters, area legislators said Tuesday.
On the other hand, the budget contained zero increases for K-12 education, Medicaid providers and state employees, the lawmakers added. Those areas could be revisited when the legislative session opens next month.
Legislators received their first look at the governor’s proposed budget during Tuesday’s address, said District 18 Sen. Craig Kennedy (D-Yankton).
“What we heard today was the 30,000-foot overview,” Kennedy said, noting lawmakers will study the figures before the 2020 session starts next month.
District 18 Rep. Jean Hunhoff (R-Yankton), who serves on the Appropriations Committee, noted the governor’s focus on this year’s disasters that have hurt the state’s economy and have left local governments struggling with major damage to roads and bridges.
Initial figures showed an estimated $21 million in damages to Yankton County from the March bomb cyclone, with $18 million of the figure covering the City of Yankton. However, the entire state has seen major damage, and South Dakota has received multiple presidential disaster declarations.
“I liked that (the governor) addressed the counties’ challenges with all the devastation that has occurred since this spring and her focus on how to assist them both short term and long term,” Hunhoff said.
District 18 Rep. Ryan Cwach agreed. “I also appreciate the governor’s plans for disaster relief for local governments that would allow counties to get state government loans to make necessary repairs to our damaged infrastructure,” he said.
The District 18 delegation proposed the funding mechanism during a teleconference with the governor’s staff several months ago, Cwach said.
“I am glad to see it happen, but we still need to learn more. For example, I hope the program will provide low-interest loans,” he said. “If so, this is going to seriously help our local governments get back on their feet after last year’s flooding.”
Currently, counties and other entities that qualify for Federal Emergency Management Agency (FEMA) assistance pay for repairs and then receive reimbursement, Kennedy said.
“Many of the local governments can’t come up with (their cost share), let alone pay the entire bill,” he said. “The governor has proposed a loan program so local government units can get the work done at a low-interest rate over a period of time. The money that local governments recover from FEMA can then be used to repay the balance.”
The District 18 lawmakers proposed using $10 million of unused state funds to help local governments with disaster recovery, Kennedy said. The governor’s budget contains a figure near that amount, he said.
“The idea apparently caught the governor’s ear,” he added.
District 21 Rep. Caleb Finck (R-Tripp) has found disaster relief on the minds of his constituents in Bon Homme, Charles Mix, Gregory and Tripp counties.
“I was at the Bon Homme County Commission meeting, and I also attending a regional meeting of officials from eight or nine counties. The disaster damage was a big issue with everyone,” he said.
“The state loans are an old program that hasn’t been used for years. And the townships didn’t have access to the loan program. Now, their roads need to be fixed, and they can have access to the money.”
District 19 Rep. Kyle Schoenfish (R-Scotland) said he supports the idea of state loans for disaster relief.
“I have always been an advocate for addressing the needs of local governments,” he said. “The funds for disaster relief will be helpful to cities, counties and townships which have a strong need for support. The budget includes funds to encourage mitigation projects by local governments that can help with similar situations in the future.”
District 17 Sen. Art Rusch (R-Vermillion) pointed to a number of budget needs.
“Obviously, the big issue is going to be the lack of funding for issues we feel are important, such as nursing homes, K-12 education, higher education and state employee salaries,” he said. “I understand that money is going to be short, but our (GOP) caucus would really like to work on getting some more money for those issues as well as the Discovery Scholarships which were one of our priorities last year. I was pleased the governor included $5 million for the Health Sciences Building at USD (University of South Dakota), which is so badly needed.”
Kennedy, a USD graduate, agreed on the need for the new health sciences building.
“I think that’s going to be a very useful project for the state and certainly for the university,” he said. “The current building that houses the health sciences at the university was a dormitory when I went to college 50 years ago, and it was old back then. That building needs to be replaced.”
While legislators commended those priorities, they expressed concern about other budget proposals.
Cwach believes the zero funding increases for the “big three” would set the state back in critical areas.
“I’m disappointed the budget didn’t include any salary increases for our state employees, particularly for our HSC (Human Services Center) employees. State government jobs used to be coveted, but the state’s continued failure to keep our state employee wages and benefits competitive is really hurting us,” he said.
“The governor also didn’t propose any increases for education. After the 10% cut to education several years ago, our education system is underfunded. We should be working aggressively to restore and increase education funding.”
Kennedy called the zero percent increases “an obvious step backwards.”
“What troubles me is that we’ve had this struggle to get out of the very bottom (of the nation) for teacher pay. We were going up a little bit, but now we’re not going to provide an inflationary increase, so we’re starting to slide backwards,” he said.
“For our state employees, they aren’t overly paid to start with. If we continue with no increases, how do we hire and retain the people we need to work at places like HSC and other state facilities? I think it’s a mistake to balance the budget on the backs of your workers.”
Cwach said he needs to learn more about Noem’s new tiered-rate system for long-term care providers.
“I’m glad to see the governor continues to address long-term care; although, I hope the Legislature can find money to appropriate to keep them open,” he said. “Our long-term care crisis still exists even after last year’s efforts. We need to do more to find a long-term solution to the way we finance our long-term care system, which is unfair to providers and patients.”
ROOM FOR DISCUSSION
Hunhoff expects legislators will revisit the zero increases when they convene and start drafting bills and crafting the budget.
“This is not the first time that the three big expenses of state government have started out with no recommended increases,” she said. “I believe this will be a major discussion piece among the legislators.”
Finck noted those budget areas are not shut out from additional money.
“Even if the governor’s proposal calls for 0% on the Big Three, she is proposing funding in other areas such as the state employee health insurance pool, the rebase of special education funding and covering any increase in K-12 enrollment,” he said.
Legislators know they are facing a downturn in agriculture, disaster demands and the loss of the internet tax, Finck said.
“Basically, everyone is holding their breath. Some of the writing is already on the wall that it’s going to be a tough year,” he said. “I think we had a lot of those assumptions built into our revenue projections. We’ll have three additional months by the time we pass the budget to see the latest figures and the latest forecast.”
The proposed budget represents a starting point, Cwach said.
“Overall, I think the governor has brought some good ideas to the table to start the conversation,” he said. “Through the legislative session, I am confident that the Legislature, working with the governor, can improve on her initial proposed budget.”
Hunhoff looks for considerable discussion in the Legislature.
“It is, again, only the beginning as we always go down this path,” she said. “New members in the Legislature, (along with) different perceptions among and within the parties, will make for interesting debate in the upcoming session.”
The 2020 Legislature begins Jan. 14 with the governor’s “State of the State” address. The session lasts 37 legislative days.
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