PIERRE — While she praised the fiscal conservatism of former Gov. Dennis Daugaard, Gov. Kristi Noem’s budget differs from the one that he offered in December.
Before a joint session of the Legislature on Wednesday, Noem outlined a plan that would provide 2.5 percent increases for education, Medicaid providers and state employee salaries.
Daugaard’s budget had provided a 2.3 percent increase in those areas.
“I’m committed to maintaining the fiscal integrity for which our state is known,” Noem said. “We won’t spend money we don’t have. We will not raise taxes.”
Noem cautioned lawmakers against planning on spending any of the revenue generated in the wake of the Supreme Court decision that allows states to collect sales taxes on online sales.
“We simply do not know how much it will bring in,” Noem said.
Noem also warned lawmakers not to move too fast on the so-called Partridge Amendment. That measure cuts the state’s 4.5 percent sales tax by a 10th of a percent for every $20 million generated in e-commerce sales taxes.
“It would be premature to cut taxes,” Noem said.
Noem’s budget for fiscal year 2020 includes almost $1.7 billion in general funds, $1.7 billion in federal funds and $1.4 billion in other funds. The budget includes about $54 million in new on-going spending.
In addition to a 2.5 percent increase for Medicaid providers, Noem’s budget includes innovation grants for nursing homes and primary and prenatal care centers. The grants—$5 million for nursing homes and $1 million for the centers—seeks to find solutions to that sector’s problems like workforce development and labor shortages.
Noem’s budget includes a combination of one-time money and ongoing funding to confront the methamphetamine epidemic. The $4.6 million would include funding for a meth media campaign and school-based meth education.
In her State of the State address, Noem emphasized the need for better broadband internet service in the state’s rural areas. Her budget includes $5 million in one-time development grants to be used in concert with broadband providers on new internet wiring projects.
“This is only going to be the beginning,” Noem said of the project.
Lawmakers gave their most extended round of applause when Noem announced $100,000 in ongoing funding to make South Dakota’s Opportunity Scholarships available to home-schooled students.
“We need to keep our best and brightest here in South Dakota,” Noem said of the state’s investments in education.
In addition to the 2.5 percent market adjustment for state employees, Noem’s budget includes $1.7 million in ongoing funding that would eliminate the need for state employees to pay a health insurance premium. She said the state’s investment would leverage $2.6 million in federal funding.
In December, Gov. Daugaard’s budget included the implementation of a “modest” premium for state employees.
In what may have been a glimpse into the way that Noem approaches budgeting, near the end of her speech she pointed out to lawmakers that her budget included 2.5 percent increases for education, Medicaid providers and state employee salaries.
“These three should rise together,” Noem said.