Governor Dennis Daugaard presented his proposed budget for FY 2015 to the South Dakota Legislature on December 3.  He proposed a $4.3 billion budget for the year. Included in his spending proposal was a 3% increase (on average) for Medicaid providers.

A one-time infusion of $125 million from the unclaimed property fund, resulted in the State having a much better financial outlook for the coming year than expected.  Daugaard told the legislators present for his budget address that the revenue of the state through September of this year initially would have allowed for only 1.6% increased for k-12 education, Medicaid providers, and state employees.  However, the one-time infusion of cash and projected revenue estimates for FY 2014 and FY 2015, allows the Governor to propose a budget that pre-pays certain debts and liabilities of the State to free up a total of $78.7 million in on-going revenue to be factored into the FY 2015 budget.

The Governor continued to adhere to his philosophy that one-time money can be spent only on one-time costs, not to fund ongoing programs or services.  By proposing to use the one-time unclaimed property windfall to pay-ahead on the Economic Development package that was passed last year and outstanding bonds, coupled with higher than estimated on-going revenues, the Governor is able to propose the 3% increases for FY 2015.

The Governor is proposing two initiatives aimed at improving access to primary care. 

  • An expansion of the USD Medical School to allow an additional 11 slots per year for 4 years, effectively adding 44 more student to each class by the time the program is fully implemented.  ($1 million cost)
  • Establishing a Rural Health Provider Loan Program to allow loans for equipment to help facilities with equipment purchases. ($1 million)  The Governor pointed to examples of allowing nursing homes to upgrade sprinklers, but there is initial interest from various groups about how this program might be used by all types of providers.

AARP South Dakota applauds the Governor for continuing to include the sales and property tax rebate for low-income elderly and disabled South Dakotans.  For FY 2015, the Governor has proposed allocating $450,000 in funding for the program.  Property taxes are the single most burdensome tax for many low-income and older homeowners. They affect older people directly as homeowners but also indirectly as renters.  Many of our more elderly citizens have lived in their homes for a long time. As their property values have appreciated, so have their property taxes. Furthermore, seniors often live on fixed incomes and cannot afford the yearly increases in their property taxes while also meeting their basic needs for food, medicine and utilities.

As expected, the Governor declined to expand Medicaid by including expansion funding in his budget but he will not rule out expansion in the future.  AARP South Dakota continues to support Medicaid expansion in South Dakota as a way for 48, 500 low-income, hard-working South Dakotans to have access to health care coverage.  This issue will get more attention during the 2014 legislative session. 


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