TAS Day 16

The House and Senate Appropriations Committees met separately today for bill hearings. Before the breakdown of the meetings today, I would like to provide a follow-up to the report on the South Dakota Investment Council budget. The Governor has recommended a budget of $8,917,882 in other funds for the investment of state funds. This is an increase in $644,845 in other fund expenditure authority.

Senate Appropriations:

SB 144-limit increases in spending by state government

According to Senator Heidepriem, the bill’s prime sponsor, this bill only allows state government to grow at a rate of 3% per year or by the rate of inflation, whichever is less. Senator Heidepriem noted that this same cap on growth has been instituted in Indiana and they have seen considerable savings. The Bureau of Finance & Management testified against the bill because it would restrict government spending on federally mandated services (Medicaid, SCHIP, etc.).

Motion to defer to 41st Day, Passed 5-1 (Hundstad opposed; Bartling excused)

SB 27-authorize the South Dakota Building Authority and the Department of Human Services to provide for the design, construction, and equipping of a dietary services building addition to the Human Services Center

The Department of Human Services (DHS) testified in favor of this bill. The current nutrition facility used at this location is out of date and as of 2013 will no longer be supported by the manufacturer. The DHS argues that they have no choice, they must build a new facility. Senator Brown moved to amend the bill to require the DHS to present evidence that they have received a preferred provider contract before they begin the project.

Motion to Amend, Passed 4-1 (Hunhoff opposed; Hundstad and Bartling excused)

Motion Do Pass as Amended 5-0 (Hundstad and Bartling excused)

SB 122-repeal certain procedures required when actual state revenues fall below legislatively adopted estimates

Senator Ahlers, the bill’s prime sponsor, stated that the law this bill repeals was ruled unconstitutional. As it stands, the law allows the Governor to set expenditure rates for all budget units when state expenditures come in lower than expected.

Do Pass 5-0 (Bartling and Hundstad excused)

House Appropriations:

HB 1051-revise certain allocations for disabilities in the state aid for special education formula

In the Governor’s recommended budget, there is no inflationary increase for education, and this bill implements the same level of special education funding for school year 2010 as school year 2009.

Do Pass 9-0

HB 1050-revise the per student allocation for the state aid to general education formula

The Governor recommended a 0% increase in the per student allocation for education, so HB 1050 sets the per student allocation at $4,804.60 for FY11. This is the same per student allocation for FY10.

Do Pass 6-2 (Burg and Wismer opposed; Dennert excused)

HB 1215-appropriate funds for increased wages for employees of nursing facilities and to transfer funds from the health care trust fund

Representative Van Gerpen presented HB 1215. This bill appropriates $537,588 from the general fund to the Department of Social Services. This money would be matched by federal dollars in the amount of up to $998,377. These funds would go to providing wage increases to employees of nursing home facilities, except nursing facility administrators. The nursing home employees would gain a wage increase of about 1%.

Chairman Tidemann deferred action on this bill

HB 1122-appropriate money for the Northern Crops Institute

Chairman Tidemann proposed this legislation that would appropriate $50,000 to the Northern Crops Institute (NCI) located in Fargo, ND. Chairman Tidemann argues that the NCI helps market the crops that are produced in South Dakota. He also stated that this spending goes back to 1983.

Do pass 7-2 (Peters and Wink opposed)

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Report Day 15

On the 15th Legislative Day, several more presentations took place in the Joint Appropriations Committee. Below is a summary of each:

South Dakota Investment Council

The total projected assets for the South Dakota Investment Council for FY11 is $8,186,220,817. The Council estimates total assets of  $13,074,254,172 by FY20. Most of the assets are in the South Dakota Retirement System. As of December 31, 2009, it is estimated that $6,577,400,000 is in the Retirement System. The Committee seemed please with the positive numbers being reported by the Council.

South Dakota Retirement System

The Governor has recommended a total budget of $3,735,876-all in other funds. The recommended increase for FY11 is $35,622-also in other funds. Some increases include $10,000 for postage, $7,000 for advertising, $2,800 for audit services, and $3,000 for increased costs for janitorial services and utilities.

There was some question raised over the large amounts of money the Retirement System spends on sending out a quarterly newsletter. Nearly $200,000 are spent each year on mailings. However, the South Dakota Retirement System seems confident that their newsletter is vital to providing for effective communication to retirees and those who will soon be eligible to retire.

Legislature and Legislative Audit

The Governor has recommended a total budget for the Legislative Branch for FY11 of $7,687,736. This total includes $7,652,736 in general funds, and $35,000 in other funds. The Governor has recommended an overall increase of $66,862 all in general funds.

Department of Agriculture

The Department of Agriculture was unable to present their budget today because of time constraints, but they did address their top priorities. There will be a budget report for the Department of Agriculture at a hearing in the near future.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 14

On the 14th Legislative Day, the Joint Appropriations Committee welcomed several presenters. Below is a summary of each agency and their proposed budgets.

State Auditor, Rich Sattgast
The recommended total budget for the Office of the State Auditor is $1,305,943. This includes $1,205,943 in general funds, $0 in federal funds, and $100,000 other funds. The recommended budget reflects a total decrease of $6,058 in general funds. The Governor has recommended an increase in personal services for an increase in state health insurance of $6,516. Decreases of $1,734 for supplies and materials and $10,840 in capital outlay are also recommended.

State Treasurer, Vern Larson
The total recommended budget for the Office of the State Treasurer is $12,321,989. This total includes $508,556 in general funds, and $11,813,433 in other funds. The total recommended increase if $647,741. This increase includes $1,697 in general funds and $646,044 in other funds. The increase in general funds is a result of increased state health insurance costs.

Commissioner of School and Public Lands, Jarrod Johnson
The total recommended budget for the Office of School and Public Lands is $772,047. Of these funds, $547,047 are general funds, and $225,000 are other funds. The Governor has recommended a total increase of $2,325 in general funds for health insurance. There is also a transfer of about $1,700 from contractual services to supplies and materials to cover the cost of mailings.

Secretary of State, Chris Nelson
The total recommended budget for the Office of Secretary of State is $4,591,752. Of this total, $1,007,237 are general funds, $3,130,575 are federal funds, and $453,940 are other funds. The Governor has proposed an increase of $30,018 in general funds, and a decrease of $33 in other funds. Secretary Nelson offered some changes to the Committee that would bring his budget to a net decrease of over $2,000.

Dusty Johnson, Public Utilities Commission
The Governor has recommended a total budget for the PUC for FY11 of $4,141,534. Of this total, $514,199 are general funds, $351,905 are federal funds, and $3,275,430 are other funds. The Governor has also recommended an increase of $259,222. This increase reflects $1,843 in general funds, $255,509 in federal funds, and $1,870 in other funds. The general funds increase is a result of increased health insurance costs. The large federal funds increase is for the Fixed Utilities Division and comes as a result of the PUC being awarded American Recovery and Reinvestment Act funds to hire an attorney and two electrical specialists to analyze dockets related to energy projects.

SD Housing Development Authority
The total recommended budget for the SD Housing Development Authority for FY11 is $9,961,306. Of this total, $0 are general funds, $1,656,196 are federal funds, and $8,305,110 are other funds. The Governor has recommended an overall decrease of $416,907 which includes $109,150 in federal funds and $307,757 in other funds. The decrease is due to the Governor’s House Program instituting lower income guidelines.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 13

On the 13th Legislative Day the Joint Appropriations Committee welcomed the Governor’s Office, the Bureau of Finance & Management, and the Department of Labor.

The total recommended budget for FY11 for the Governor’s office is $2,717,761. Of this total, $2,464,465 are general funds, and $253,296 are federal funds. This recommended budget reflects a total increase of $7,395 over FY10. $6,617 of the increase comes in general funds, and $778 of the increase comes in federal funds.

For the Bureau of Finance & Management, the total recommended FY11 budget is $21,200,290. This includes $8,134,630 in general funds, $6,000,000 in federal funds, and $7,065,660 in other funds. The Governor has recommended an overall decrease of $574,630 for FY11. This reduction reflects a $626,903 decrease in general funds and a $52,273 increase in other funds.

Department of Labor Secretary Pamela Roberts presented the budget for her department.

The total recommended budget for FY11 is $42,687,448. Of this total, $876,167 are general funds, $34,827,066 are federal funds, and $6,984,215 are other funds. This budget recommendation reflects an increase of $150,599 over FY10. This increase includes $4,164 in general funds, $96,378 in federal funds, and $50,057 in other funds. Most of the increase is due to the increase for state health insurance. There was also discussion over what the appropriate level is to keep the Unemployment Insurance Trust Fund.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 12

The House and Senate Appropriations Committees met separately to consider several bills.

Senate Appropriations

SB 26-Make an additional appropriation to the Board of Regents to construct an addition to the Northern State University Joseph H. Barnett Center.
All funds are available through Northern State Foundation-no general funds. The funds are not only pledged, the funds are there.
Do Pass Amended (7-0)

SB 46-Make an appropriation for costs related to suppression of wildfires in the state and to declare an emergency.
This bill moves $1,230,349 from the general fund to the fire suppression fund in order to correct the negative balance.
Do Pass (7-0)

SB 47-Authorize a carryover of the fiscal year 2010 state aid to special education appropriation to fiscal year 2011.
$6.7 million will be left in the state aid to special education fund after FY10. This bill would carry that money over to FY11.
Do Pass Amended (7-0)

SB 48-Make an appropriation for the payment of extraordinary litigation expenses and to declare an emergency.
$944,610 from the general fund are needed to move the extraordinary litigation fund out of its negative balance.
Do Pass (7-0)

SB 64-Make appropriations from the water and environment fund.
This is the omnibus water funding bill. This bill is recommended each year by the Governor. $6.3 million dollars will go to Lewis & Clark rural water system, $350,000 will go to the Southern Black Hills Water System, $3,225,000 will go to the consolidated program, $1 million will go to solid waste management program, and  $1.4 million will be for the construction and maintenance of landfills.
Do Pass (6-0, Hundstad excused)

SB 65-Deferred by Chair

SB 66-Make an appropriation to fund property tax and sales tax refunds for certain elderly persons and person with a disability
Bill appropriates $650,000 to the Department of Revenue and Regulation to provide refunds for real property tax and sales tax to elderly persons and persons with certain disabilities.
Do Pass (7-0)

SB 71-Provide driver licensing stations and provide the same level of service at each station as was prior to October 1, 2009.
This bill would re-open the driver licensing stations that closed as of October 1, 2009 and restore them to the same level of service. Senator Kloucek is the sponsor of this bill and spoke in favor of it. He suggested that rural South Dakota is suffering because everything is shifting to urban America. The Department of Public Safety spoke in opposition to the bill. DPS stated that they would need additional funds that are not part of the Governor’s recommended budget to fund these licensing stations. The Bureau of Finance & Management also spoke against SB 71 because of the added costs.
Motion to defer to 41st Day, Passed (Bartling, Ahlers opposed)

SB 73-Revise the General Appropriations Act for fiscal year 2010 to provide language interpreters at driver licensing stations, two in Sioux Falls, two in Rapid City, and two in Aberdeen. Transfers 6 FTEs from Department of Executive Management in the Office of the Governor to the Department of Public Safety.  Motion to defer to 41st Day, Passed (7-0)

House Appropriations

HB 1010-Revise the requirements for the compilation and printing of the legislative manual referred to as the blue book
The Secretary of State, Chris Nelson, stated that this bill would save $6,000 in printing the Blue Book every six years. Currently, the same historical information is printed in every book.  According to Secretary Nelson, would like to stop reprinting the same information and only print new information.
Do Pass (7-0; Deadrick and Peters Excused)

HB 1044-Make an appropriation to reimburse certain family physicians, physicians, and dentists who have compiled with the requirements of the physician tuition reimbursement program, the midlevel tuition reimbursement program, and the dental tuition reimbursement program
This bill appropriates $236,656 dollars to the Department of Health for reimbursements to individuals who have completed the tuition reimbursement program. Do Pass (7-0; Deadrick and Peters Excused)

HB 1048-Revise certain provisions relating to a previous appropriation for the National Guard armory construction
This bill will revert funds back to the State any funds that are not expended for this project by June 30, 2014.
Do Pass Amended (7-0; Deadrick and Peters Excused)
HB 1060-Revise certain provisions regarding the refunds for new or expanded agricultural facilities and the refunds for new or expanded business facilities and to declare an emergency Do Pass (6-;1 Burg Opposed; Peters and Wink Excused)

HB 1056-Make an appropriation from the coordinated soil and water conservation fund to the State Conservation Commission and to declare an emergency.  This bill appropriates $1,000,000 from the coordinated natural resources conservation fund to the State Conservation Commission.
Do Pass Amended (8-0; Peters Excused)

HB 1041-Repeal the discount on the sales of cigarette tax stamps to distributors
Referred to House Taxation, Passed (7-0; Dennert and Peters Excused)

HB 1027-Authorize the Board of Regents to construct a visitor center on the grounds of McCrory Gardens on the campus of South Dakota State University, to accept donations for such purpose, and to make an appropriation therefore
This bill gives the Board of Regents authority to spend $4,000,000 in other funds raised for this project.
Do Pass Amended (7-0; Dennert and Peters Excused)

HB 1052-Revise the definition of full-time equivalent to exclude graduate students employed by public postsecondary institutions for research and teaching. With this bill, hours that are paid to students enrolled in and employed by postsecondary institutions for research and teaching will not utilize full time equivalent (FTE) allocation. Instead, these students will be treated more along the lines of interns.
Do Pass Amended (5-2; Wismer and Wink Opposed; Dennert and Peters Excused)

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS DAY 11

On the 11th Legislative Day, the Joint Appropriations Committee welcomed the Secretary of the Department of Public Safety, Tom Dravland.
The Governor has recommended a total FY11 budget of $52,070,337 for DPS. This total includes $3,669,056 in general funds, $21,892,382 in federal funds, and $26,508,899 in other funds. This budget reflects a total FY11 budget increase of $413,452 for DPS. This total includes $14,458 in general funds, $11,210 in federal funds, and $387,784 in other funds.  The majority of the increase is for operating expenses for inspections and licensing.

The Committee also welcomed Darin Bergquist, the Secretary of the Department of Transportation.

For FY11, the Governor has recommended a total budget for the DOT of $577,269,957. Of this total, $519,825 are general funds, $387,639,330 are federal funds, and $189,622,890 are other funds. The Governor has recommended a total decrease of $19,815,574 in total funds. This decrease reflects an increase of $2,574 in general funds, $6,973,065 in other funds, and a decrease of $26,791,213 in federal funds.

The vast majority of federal funds decrease is from construction contracts. Although the Governor recommends an increase in other fund expenditure authority in the amount of $6,930,744, he has also recommended a decrease of $33,020,000 in federal fund expenditure authority for statewide road and bridge repair. This decrease is the result of money authorized by the American Recover and Reinvestment Act (ARRA) expiring. Secretary Bergquist did note that there are other federal funds to replace some of the lost ARRA funds. The Governor has recommended an increase of $4,394,411 in federal fund authority and $1,285,190 in other fund authority for airport projects.

Secretary Bergquist also fielded questions from the Committee dealing with priorities in highway improvements. Several Senators and Representatives made comments about highways needing improvements in their districts and the Secretary described future plans to continue to address problems with state highways.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 10

After a day off due to inclement weather, the Joint Appropriations Committee was back in full force today with both morning and afternoon sessions. The Committee welcomed Thomas Oster, Secretary of the Department of Education (DOE) and Tamara Darnall, the Director of the Office of Finance and Management for the Department.

The Governor has recommended a total budget fsor FY11 of $660,685,401 for the DOE. Of this total, $399,518,299 are general funds, $257,017,346 are federal funds, and $4,149,756 are other funds. This recommendation contains a total decrease of $14,564,328. Of the total decrease, $6,802,463 comes in general funds, and $7,903,826 comes in federal funds. There is a total increase of $141,961 in other funds.
Director Darnall discussed the importance of the Longitudinal Date System Grant which consists of $10,000,000 from the federal government over a three year period. This system will help track K-12 and higher education student data. Director Darnall also briefly discussed increase in the amount of $14,584 ($6,852 general) for increase health insurance costs, and an increase of $16,494 ($15,791 general) for increases in Bureau of Information and Telecommunication (BIT) billing.

State aid is one of the largest pieces of the DOE budget. State aid includes aid to general education, special education, sparsity payments, school district consolidation incentives, and technology in schools. The Governor has recommend a total decrease in state aid of $9,405,198 ($9,081,473 general).

The afternoon session of the Joint Appropriations Committee consisted of a presentation by Ron Wheeler, the Executive Director for the Sanford Underground Laboratory at Homestake. The total recommended budget for FY11 for the laboratory is $14,199,023 in other funds. This reflects a total decrease of $13,422,835 in other funds. Director Wheeler noted that the National Science Foundation (NSF has already invested $80,500,000 in the lab, and the Department of Energy has invested $36,000,000.

Another important note about Director Wheelers presentation is that the NSF will decide in May of 2011 whether or not to continue funding of the lab. The State of South Dakota cannot afford to operate this facility. If the NSF does not choose to fund the laboratory in May, the facility will be shut down or the Department of Energy may choose to use it for narrowed purposes. If the NSF does approve the laboratory, the construction of the facility will cost a minimum $500,000,000.  The economic impact to South Dakota would be tremendously beneficial.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 9

Committees did not meet today due to weather, so there will be no report
for Day 9.

TAS Day 8

The Joint Appropriations Committee met today despite most other committees being canceled due to inclement weather. Several of the state’s university presidents presented this morning. The South Dakota School of Mines & Technology began the day, followed by Black Hills State University, Dakota State University, and Northern State University.

The School of Mines & Technology has a recommended budget increase this year of $5,317,695. Of these dollars, $526,394 are general funds, $3,008,825 are federal funds, and $1,782,476 are other funds.

Black Hills State University was recommended a $2,769,702 increase. The vast majority of these funds are other funds. $55,461 are general funds, $21,324 are federal funds, and $2,692,917 are other funds.

The total recommended increase for Dakota State University is $872,900. Of this total, $39,910 are general funds, $348,603 are federal funds, and $484,387 are other funds.

Northern State University was recommended an increase of $793,857. Of the total, $49,901 are general funds, $749,128 are other funds, while there is a decrease of $5,172 in federal funds.

The South Dakota School for the Blind and Visually Impaired was recommended a total budget increase of $13,547. This includes $12,767 in general funds, $780 in federal funds, and no other funds.

The South Dakota School for the Deaf has a recommended total increase of $16,325. All of these dollars are from the general fund.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.

TAS Day 7

Today, the Joint Appropriations Committee welcomed the Board of Regents for the first part of a two-day hearing process. Among the presenters today were Terry Baloun, President of the Board of Regents, Kathryn Johnson, Vice President of the Board of Regents, and Monte Kramer, System Vice President for Administration.

The total recommended budget for the Board of Regents for FY11 is $720,853,294. Of the total, $174,272,956 are general funds, $193,516,012 are federal funds, and $353,064.326 are other funds. The total recommended increase is $68,090,168. Of the total, $3,370,855 are general funds, $34,755,015 are federal funds, and $29,964,298 are other funds.

President Baloun noted that in the last ten years, state support for South Dakota public universities has dropped from 58% to 45%. He also noted that in order to replace these cuts, the cost has been shifted to students.

Recommended general fund budget changes are as follows:

Utilities-decrease of $12,912
REED base budget support-increase of $106,241
Ph.D. in Physics-increase of $970,000
Lease adjustments-decrease of $2,708
Health insurance-increase of $705,297
AARA funds replacement-increase of $109,427
Performance pool-decrease of $500,000
Opportunity Scholarship-increase of $1,995,510
Total increase-$3,370,855

The presidents of both The University of South Dakota and South Dakota State University also presented today on the state of their respective institutions. The presidents of all other state institutions of higher education will present at the meeting tomorrow.

All figures can be confirmed by following links found on these pages:http://legis.state.sd.us/sessions/2010/ReferenceDocuments.aspx

Specific facts and figures cited in the Good Morning Taxpayer – TAS Report
have all been obtained through the official Legislative website,
http://legis.state.sd.us and by attendance at the daily committee meetings.