2022 S.D. Legislature: Appropriations committee have big-dollar decisions to make

The Legislature is now in full swing and we are hearing specific Bills in the various policy committees as well as votes on the House floor.

There are many requests coming before the Joint Committee on Appropriations. The requests include current expenditures, as well as long-range planning. Some of the federal debt money that we have received must be spent within the next few months, whereas other disbursements can be held back until the end of 2026.  

As you will recall, the federal funding was created with little to no detailed planning or purpose. Now, after nearly two years since the flood of federal funding, we have received some final rules concerning the initial disbursements, but we are still waiting for final rules as to the remaining funds. At this point in time, it is highly unlikely that any audits of these expenditures are complete as the rules have been in flux. So, receipt and expenditure of these funds is being done with some guidance but also with some trepidation. Our discussions in the Appropriations Committee considers whether we believe these various allocations of funds might stray into the category of being subject to a ‘likely’ audit. The concern in regard to an audit is not so much whether there could be a ‘theft’ of funds, but rather whether the use of the funds ultimately might not fit within the intended use of the funds and be subject to reimbursement.  

This year we will likely hit something of an all-time high in the number of Bills coming before the Legislature.  Those Bills address not only funding of various programs and projects, but also a flurry of Bills addressing the use and distribution of both medical and recreational marijuana. As you know, the South Dakota Supreme Court found that the vote concerning the Constitutional Amendment as to the use of marijuana did not meet the State’s Constitutional requirement as to voting on a single subject. Those issues will get plenty of attention, but there are no clear preferences at this time.

In regard to education, I have asked the Secretary of Education why we rank near the middle of the states in spending per student, but we typically rank at the lowest levels in spending for teacher pay. The response is that it appears we need an increase in our efficiencies. A comprehensive review of expenditures and outcomes for education is needed. We should also consider whether the receipt of federal funds justifies the cost of administering those funds. In recent years, we are receiving approximately 20-23 percent of our budget from federal funds. This year it is moving to approximately 33 percent of our budget, but the expectation is that when we get past the deluge of federal funds associated with COVID-19 then we will revert to the lower percentages. As we have come to know, federal programs create dependency. This needs to remain on our radar in the next few years to ensure that we ‘right-size’ these percentages as well.

Finally, our state has gone through many approaches to raising revenue to support state and local government. There have been many changes to our tax structure over the past 60 years. We used to have a personal property tax, lower sales tax, state inheritance tax, and various exemptions from all tax. Times have changed and there is no time like the present to ‘right-size’ our tax structure to meet our actual needs and to bring back a sense of fairness and fiscal responsibility.   

I invite you to review the Committee calendars and agendas to see which issues are of special interest to you.  Please go to www.sdlegislature.gov to listen in on the meetings or to find out when and where you can be involved.