S.D. governor’s budget address is first round in long, long process, appropriations leader says

Capitol News Bureau
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PIERRE, S.D. (KELO) — With 20 years under her belt, Jean Hunhoff is one of the longest-serving current members of the South Dakota Legislature. The Yankton Republican is the incoming chair for the Senate Appropriations Committee when the 2021 session opens January 12. That puts her in a leadership role in adjusting the current budget that began July 1 and the next budget that starts next July. 

Hunhoff told KELOLAND News on Monday she doesn’t know what to expect when Governor Kristi Noem makes budget recommendations Tuesday afternoon to a joint gathering of state lawmakers in the House chamber at the Capitol in Pierre. 

“I’m going to be listening just like everyone else is,” Hunhoff said.

The 18 lawmakers — nine from the House and nine from the Senate — who comprise the Legislature’s Appropriations Committee typically arrive at a revenue estimate in late February that attempts to predict how much money will flow in month to month starting in July. They use those numbers to build a budget that the two chambers pass in March, then come back the next January to amend that budget while starting fresh on the next budget.

There are still coronavirus relief dollars left, Hunhoff said, and some of that federal aid is being redirected within state government, to pay people in the state Health Department, the state Department of Corrections, the state Bureau of Finance and Management and other departments, replacing general funds for their work in dealing with COVID-19.

The result could be a record surplus, especially combined with state government’s normal sources of revenue running unexpectedly strong, in part because of other federal aid flowing into South Dakota’s economy related to COVID-19. 

“There’s a number that’s being knocked out there, somewhere between $150 and a little over $200 million,” Hunhoff said about the potential surplus revenue. “Those dollars will be one-time dollars, and what that means is, that those dollars can only go towards expenses that are one-time. They’re not continuing, we can’t raise, make salary increases, you can’t raise Medicaid rates. But what you can do is look at finite funding that goes toward projects. 

“And I know the governor is going to be presenting tomorrow what she believes are the priorities. I know that the Legislature, both the House and the Senate, have been talking about those dollars, and they’ve been identifying what priorities they would like to see. 

“The key will be, after we hear the budget address and we know what both houses would like, how many of those items are very similar and the same thing we can work together on, and where are those areas that we might see differences on for different priorities, and how we work together to create the best budget that we have for South Dakota.” 

Hunhoff said appropriators don’t know what’s needed for COVID-19 in the year ahead and what the costs will be, although they do know the federal government plans to pay for the vaccines.

“Right now, they’re going to be covered, they’re going to be free, it’s just the administration (costs), and there will be opportunity for those who cannot afford to get the vaccine. So I think we’re still playing out. 

“Plus the other issue out there is what’s happening with our state revenue,” she continued. “Christmas is traditionally a big month for sales tax in South Dakota. With COVID, we’re going to have to see how that rules out. We have not gotten the most recent numbers. The last numbers we got were in October. We were ahead of budget. But things can change very quickly, especially if we see that, as the economy continues, if we see any more escalation in COVID numbers, how that impacts the workforce and what’s available.” 

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