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Daugaard Unveils 2014 Budget Proposal

December 3, 2013, 5:14 PM by Ben Dunsmoor

Daugaard Unveils 2014 Budget Proposal

South Dakota Governor Dennis Daugaard says a nearly $70 million windfall from the state’s unclaimed property fund will allow the state to hand out higher than expected increases in the next budget. Daugaard unveiled his annual proposal Tuesday in Pierre.

South Dakota has brought in millions more from the unclaimed property fund because more banks have moved home offices to the state and the legislature decreased the time for the public to claim the money from five years to three years - making more money available.

That money will help pay off state bills and free up funds for education and Medicaid providers. If it wasn’t for the windfall, Daugaard said Tuesday’s budget proposal would have been different.

“Fortunately, the situation has changed since September and of course the most significant change was in the unclaimed property that we received just last month,” Daugaard said.

Daugaard proposes using the extra millions along with other one-time funds to pay for the new Building South Dakota economic development fund and to pay off high-interest bonds.

“Doing this frees enough ongoing dollars to fund schools, providers and salary policy at a high level,” Daugaard said.

It means South Dakota school districts will get a three percent increase next year, which is higher than the 1.6 percent inflation increase. Medicaid providers and state employees will also get a three percent increase.

“This is a prudent use of one-time dollars to remove a liability just as in your own home you might use an inheritance to pay off your mortgage early,” Daugaard said.

Daugaard says the plan frees up money not only for the next budget but also future years, putting South Dakota on more solid financial footing.

“I look forward to continuing to work with you this year and through your efforts we’re building an even stronger South Dakota,” Daugaard said.

Legislators have been receptive to the plan so far.  Both Republicans and Democrats have called the proposal innovative.

“Just in the hallway conversation, so far, people have been very receptive to it and pretty excited about the concept. They’re probably more excited about a 3.0 increase in education and health care,” Senate Majority Leader Tim Rave of Baltic said.

The Associated School Boards of South Dakota calls the plan a good first step. Executive Director Wade Pogany said districts would ultimately like to see a 3.8 percent increase to get schools back to the funding levels before the cuts to education were made in 2011, but he says the group is grateful for the three percent increase proposed by Daugaard.

Democratic Representative Susan Wismer, who serves on the Joint Appropriations Committee, also calls the proposal innovative but would like to see even more money for schools and Medicaid providers.

“They’re still at less money than they were five years ago and we’re all dealing with increased costs everywhere. We’re paying our nursing home workers a wage they can’t live on without federal assistance themselves, and we’re thumbing our nose at federal money but not increasing our Medicaid rate more,” Wismer said.

Daugaard said during the address that he is not going to expand Medicaid under the Affordable Care Act at this point because the federal government is unreliable and the roll out of the new health care law has been ‘chaotic.’

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