Five items you missed this week in the South Dakota Legislature
Budget tricks, Noem's policy blitz and a child care blip.
PIERRE, S.D. — The days in the South Dakota State Capitol continue marching.
This week, the sixth of nine full weeks in session, was a bit of a transitory experience. Gone were the fourth and fifth weeks of deep committee work, but the coming weeks of tough taxing and spending decisions have not yet arrived.
With some weeks since any sort of headline-grabbing drama, legislative leaders feel good about their position.
“I feel like we're ahead of time ahead of schedule where we were in past years. And what we're looking at right now is just what our obligations, what are our priorities, and where are we on some of these big ideas,” said Senate Majority Leader Casey Crabtree, of Madison.
Here are five things you may have missed over the week.
What’s the point of reserves anyway?
Taking the difference between last session’s adopted budget and the expected revenues by the end of this budget year in June, a potential surplus of $340 million this budget year would dwarf last year’s record number of $115 million.
While a flurry of special appropriations is expected, which means taking current year dollars and moving them toward certain projects, the state could easily see another $100 million hitting its bottom line.
The huge windfall would keep state coffers overflowing, even after lawmakers transfer hundreds of millions of reserve dollars toward a fund for constructing a new men’s prison.
But many readers may be wondering: what’s the point of having $300 million or so in the bank if none of that can be used for paying teachers, cutting taxes or helping struggling counties?
Reserves are still useful: putting money toward a men’s prison means a less expensive bond measure and fewer ongoing dollars paying interest down the road. But they won’t be going to any of the worthy causes mentioned above.
The answer, albeit boring, comes down to sound budget mechanics.
“In your personal budget, you don't want to spend your savings account on your heating bill,” House Majority Leader Will Mortenson, of Pierre, who is leading his caucus in budget talks, explained. “Because eventually, it will run out.”
The heating, of course, is an analogy for the state’s “ongoing” expenditures, bills that come due every day of every month of every year.
Pass a $100 million tax cut? That’s something lawmakers can’t take back without serious political ramifications.
Increase funding for Medicaid providers or salaries for teachers? Same deal.
Sure, a sound set of reserves could fill a small funding gap in these promises for a few years, and potentially longer if revenues remain strong.
But that would be a case of budget déjà vu for Sen. Jean Hunhoff, of Yankton, who was a lawmaker during the beginning of the Dennis Daugaard administration, when the state tightened its belt to the tune of a 10% across-the-board cut to stop using reserves to fund a “structural deficit.”
“I lived through the 10% budget cut and I don't want to have anybody have to do that again,” she said. “That is not an experience you want to have.”
In short, the aversion to using reserve dollars to fund ongoing programs is why the revenue estimates, which were set this past Wednesday, are so important.
The estimate measures the expected “ongoing” funding of the coming budget year, thus setting the boundaries of discussion on, in Mortenson’s analogy, the heating bill, groceries and car insurance, the every-month necessities that won’t go away even as earnings fluctuate.
Child care takes backseat during session
For an issue affecting every corner of the state, legislative action on child care this session was muted, with just one proposal entering the public docket — House Bill 1161, which looked to slightly relax staffing ratios in day cares.
“Daycare providers across state are having a difficult time finding and retaining help,” Rep. Jon Hansen, of Dell Rapids, said during a committee hearing on the bill on Tuesday this week.
That bill is now tabled, since, according to Hansen, the administration is taking a deep dive into the sort of administrative rule changes, including staffing ratios, that can help ease some of the burdens on child care providers.
But lawmakers say that doesn’t mean they’re ignoring the issue.
“Out of this new class of legislators, there’s a lot of us with young children. We’re seeing, hearing, and feeling the childcare challenges in our state too,” Rep. Tyler Tordsen, of Sioux Falls, told Forum News Service.
For Democratic Sen. Reynold Nesiba, of Sioux Falls, the answer is simple: subsidize providers with state dollars, putting skin in the game beyond just the tens of millions in one-time federal grants offered to entities from pandemic funding sources.
“If you want high quality, affordable childcare that pays a living wage, the state has to subsidize it,” Nesiba said, noting that South Dakota has some of the highest workforce participation rates among parents.
Most members of the South Dakota Republican Party, where any meaningful action will have to begin, don’t necessarily agree. While keen on seeing where the state might fit in, several conservative lawmakers told Forum News Service they disagree with Nesiba’s approach.
“The administration might just come in and make some amendments via rule and provide some assistance in needed help to the day care industry through regulation,” Hansen said. “Without necessarily having to just try to throw a bunch of state money at the problem in hopes that somehow solves it.”
The child care issue is a primary candidate for a summer study, although Senate Majority Leader Casey Crabtree, of Madison, was clear that any attempt at studying the problem would have to be focused on one specific part of the wide, complex issue, potentially working with businesses to create a child care model for the future.
“Can you get a group focused?” Crabtree said about the potential summer study. “Because otherwise, you’re talking about the problem and never get to solutions.”
Secretary Joe Graves helps defeat school lunches proposal
A proposal to make school lunches free in the state of South Dakota was defeated in the House Education committee by a 14-1 vote earlier this week, despite proponents hammering home the positive impact that making lunches free and available to all students has on both learning and behavior in school.
Were House Bill 1221 to pass, a cost estimate from the Legislative Research Council indicated that the policy would have cost the state around $38 million in the first year, although the actual number may have been closer to $33 million since an amendment removed free breakfast, which the fiscal note included.
“No child should go hungry because of situations out of their control,” Rep. Kadyn Wittman, of Sioux Falls, the prime sponsor of the bill, told the House Education Committee. “Nutritional food is incredibly important for growing kids.”
In Sioux Falls alone, according to proponents, school lunch debt sits at around $100,000. It’s a reflection of the impact that rising food costs are having on the number of hungry children in school districts large and small across the state, proponents of Wittman’s proposal said.
It's also, more recently, a result of an end to the pandemic-expanded federal aid to schools for free lunches, which was cut off by Congress last summer.
Despite a broad set of proponents including educators, public education lobbyists and food-insecure students, one opponent stood out for their deep background in education — Joe Graves, the new head of the state Department of Education and the former superintendent of the Mitchell School District.
He criticized the proposal as encouraging food waste, saying it would put into statute a promise that would come along with rapidly increasing costs. He also argued that the current donation-based system worked well.
“Most of the money you're spending is going to go to families who don't need it, but as long as you're providing it, they're going to send their children and eat that breakfast and lunch,” Graves said. “It's really a misuse of those dollars.”
Comments from the Department of Education go through a public information officer. Forum News Service earlier this legislative session was told that, “with the hectic nature of legislative session,” Graves would be unable to participate in an interview.
Crossover Day prepping
One day stands above the rest in the legislative calendar: Crossover Day, this year scheduled for this coming Wednesday, Feb. 22.
Under legislative rules, Crossover Day is the final day to advance a piece of legislation out of its chamber of origin, meaning that, by the end of the day, the South Dakota House will have considered every House bill thus far unattended to, and vice versa in the Senate with Senate Bills.
Think of it as a sort of midterm for the ten-week legislative class.
In past years, the day has quickly turned into night — a cramming session made up of dozens of bills considered by an ultimately crabby set of lawmakers.
Last year, the House calendar on Crossover Day included 30 bills and lasted six hours.
But this year, legislative leadership says that won’t be the case, as the chambers have kept up a solid pace of considering bills throughout the first six weeks of the session.
They say it’s a result of a more focused session and a solid working relationship between committees and chambers.
“Like I told my caucus, it's not just in downtown Ft. Pierre that bad decisions are made after dark,” said House Majority Leader Will Mortenson, of Pierre. “We want to keep running the House of Representatives during business hours.”
Mortenson expects a calendar of about 12-15 bills each on Tuesday and Wednesday this coming week.
In the Senate, lawmakers are through about 90% of their bills, meaning they’ll only have to consider around 10 bills each day to keep pace with the legislative calendar.
“I think that we're showing that we can get things done every day,” Senate Majority Leader Casey Crabtree, of Madison, said. “And that we can work together in a very civilized process and kind of give a good example of how government should work.”
Noem’s policy visions find mixed results among lawmakers
In her State of the State address to kick off the legislative session, Gov. Kristi Noem announced seven concrete policy proposals that made their way into proposed laws this session.
Two of them, a change to unemployment contribution rates and an extension of postpartum Medicaid coverage, are now law, either passed through the South Dakota Legislature or put into administrative rules.
Another proposal, a loosening of certain occupational licensing requirements for those moving into the state with out-of-state licensing, touted as a potential way to address workforce shortages in certain fields, passed the Senate 33-1 and should find little resistance in the House.
Two others, a paid family leave program and an education scholarship for foster children, are dead in the water, having been rejected by lawmakers as either poorly constructed or ineffective uses of state dollars.
Noem was not happy with that outcome.
In a statement last week criticizing the failure of her Stronger Families Scholarship, Noem blamed lawmakers for “[leaving] foster children behind once again,” especially considering what she called the “lies” of the public education lobby.
Yet the relative success of the administration’s 2023 session is still very much up in the air, though onlookers should know much more by the end of Tuesday, Feb. 21.
On that day, rounding out the State of the State seven are Noem’s two keystone policy proposals — the $100 million grocery tax cut and the establishment of a committee to review foreign farmland purchases — will face their toughest scrutiny yet, in the House Appropriations Committee and the Senate floor, respectively.
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or email@example.com.