Gov. Daugaard delivers FY2018 budget to joint session of SD Legislature

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Gov. Dennis Daugaard presented his sixth budget address to the South Dakota Legislature Tuesday afternoon. His budget address portrayed a positive economic growth, but at slow, stable rates, similar to what has been experienced the past few years, with no budget cuts. The $1.62 billion general budget proposal includes spending increases for the upcoming budget year (FY2018) and includes $20 million in general state spending increases for the upcoming year.

The money would go to funding increases for education, Medicaid providers and state workers. The GOP-held Legislature will reshape the current budget and approve the next one during the legislative session that begins in January.

The governor’s plan anticipates that revenue for the current budget year will be about $26.1 million lower than previously anticipated. With current-year spending also coming in below projections, plus some new money, Daugaard proposed roughly $22.7 million in one-time spending for the current budget year. Here is a breakout of revenues and expenses that directly affect health care providers:

Revenues

  • FY2017 ongoing receipts revised: $1.572 billion, a projected decrease of ($26.1 million) caused by weaker sales and use tax from less spending in agriculture equipment, low inflation lower tourism and online purchasing.
  • Revenue available for ongoing revenue growth in FY2018: $19.7 million. Recommended adopted FY2017 general fund budget of $1.598 billion and FY2018 general fund budget of $1.618 billion.
  • Available one-time available funds for FY2017 $22.7 million will help fund Rural Recruitment Assistance for Healthcare Workforce at $843,081 and Veterans Home at $830,466.

Expenses

  • Medicaid Discretionary Inflationary Update: 1 percent increase – approximately $4.3 million expenditure from general funds.
  • Continued Targeted Investments for Community Based Service Providers (i.e. Home Health Services, Hospitals DPU Psychiatric) – Provider Enhancement to 90 percent (Complete Year 2) – $709,252.
  • State employees and primary public education both receive a 1 percent increase.
  • Medicaid FMAP: The state blended rate share decreases 1.13 percent from 45.89 percent to 44.76 percent a $9.5 million saving to the General Fund.
  • Medicaid Growth in Eligible and Utilization: A 1.1 percent growth rate of $6.3 million.

The governor remained committed to a balanced budget, stating, “South Dakota is working. Working better than many other states,” Daugaard said. “We can proudly say that we balance our budget honestly every single year without gimmickry or overly borrowing.”

In years past, South Dakota lawmakers have not diverted from the proposed governor’s budget, additional details of the budget will continue to emerge over the next several days and weeks.

Gov. Daugaard’s FY2018 Budget recommendation slides can be found here.