SIOUX FALLS, S.D. (AP) — South Dakota Gov. Dennis Daugaard will propose a cautious state budget with moderate spending increases that are unlikely to give school districts and medical providers as much state funding as they want.
Daugaard has said he'll propose boosting state aid to schools by the rate of inflation up to a maximum of 3 percent, as provided in state law. He also will ask the Legislature to give medical providers a small increase in Medicaid reimbursements to cover the effects of inflation.
But the governor will not use Tuesday's speech to the Legislature to propose any larger permanent increases to make up for budget cuts made in the 2011 legislative session, the Argus Leader newspaper reported (http://argusne.ws/TCy7cf ).
"After the cuts that we all had to share the sacrifice of, now we're at a situation where as revenue improves, we should be able to improve expenditures," the Republican governor said. "I think we need to be heartened by the improvement in revenues, but we also need to be cautious."
Dave Hewett, president of the South Dakota Association of Health Care Organizations, said offsetting the effects of inflation is a start, but medical facilities are still being paid less than they were four years ago.
Sandy Arseneault, president of the South Dakota Education Association, said the teachers union wants the Legislature to give school districts more than inflationary increase provided in state law.
"I hope we can follow the law and give the schools what they statutorily are required to do, and then remember that many of our schools are still facing financial challenges after the steep cuts we had," Arsenault said. "How can we work cooperatively and collaboratively together to find out how we take on those funding challenges?"
Tuesday's budget proposal might be far different than the spending plan that the Legislature will approve in March.
Economists worry that if Congress fails to adopt a tax and spending measure by the end of the year, the economy could falter and the state could have to spend millions of dollars to replace lost federal aid. The drought and Washington's inability to pass a farm bill also threaten the state's agricultural economy.
Democratic lawmakers said that if the state finds itself with more money, it should give it to programs whose funding was cut in 2011.
"Things have improved pretty drastically, and in a good way. I think we need to look at trying to catch up from some of the cuts," Sen. Billie Sutton, D-Burke, said.
Republican Sen. Corey Brown of Gettysburg said he doubts there will be much money left over for extra spending on schools or medical providers. He said many lawmakers want to get away from last year's pattern of giving one-time money instead of ongoing increases.
"We're going to have to see some pretty staggering economic growth if you're going to see the ability to put a substantial amount of extra dollars toward something," Brown said.
Information from: Argus Leader, http://www.argusleader.com