South Dakota Gov. Kristi Noem laid out her $5.7 billion spending plan for fiscal year 2023 to lawmakers Tuesday, including a 6% raise for state employees, teachers and health care providers.
Noem also is asking lawmakers to put about 14.2% of the budget rather than the traditional 10% in reserves as the state will end this fiscal year with surpluses.
“We are projecting to have $215.5 million in one-time dollars for fiscal year 2022,” Noem said. “And we are projecting an additional $157.6 million in ongoing general funds.”
Noem’s budget does not include a tax increase, but it also does not reduce taxes.
She called the 6% pay raise for state employees and health care providers “unprecedented but necessary.”
“Many of these positions in these three areas are not keeping pace with their counterparts in the private sector or other states,” Noem said. “They deserve our support. Let’s give it to them.”
Noem also recommended several initiatives to help grow the state’s workforce. Her plan sets aside $200 million for workforce housing grants with an additional $200 million coming for cities and $200 million coming from developers.
“With this investment in housing, we will help free up our tight housing market,” Noem said. “We will open up opportunities for more freedom-loving Americans to move to South Dakota, and we will accommodate the businesses who want to move here, as well.”
Noem proposed using $100 million in federal funds as grant money for startups and new day care centers. The governor also proposed using $69.6 million in federal funds to build and remodel South Dakota’s health lab.
Noem said she was not going to ask lawmakers for money for new prisons but requested they set aside reserves for future construction. She also set aside $2.1 million for pay raises for correctional officers.
The governor is proposing $28 million for a new Community Work Center for Women in Rapid City.
“This will help incarcerated women learn the skills they need to get a job, contribute to society and avoid a life of crime,” Noem said.
South Dakota Democrats praised some of Noem’s proposals.
“With the economy bouncing back from COVID-19, Gov. Noem agreed with our request to raise pay for teachers and state employees,” House Democratic Leader Jamie Smith said in a statement. “While we recognize this is a large increase, it only keeps pay even with inflation, and we would have liked to see even higher increases. Plus, with such a large amount of available funding, Democrats would like to see direct payments to South Dakotans.”
South Dakota Democratic Party Chair Randy Seiler attributed some of the state revenue increase to the $850 million the state is receiving from the American Rescue Plan Act (ARPA).
“While Governor Noem might not want to admit it, South Dakota’s budget is seeing a huge boost thanks to President Biden’s American Rescue Plan Act,” Seiler said in a statement.
