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Price of SD government workers' benefits rises

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News Mitchell,South Dakota 57301 http://www.mitchellrepublic.com/sites/all/themes/mitchellrepublic_theme/images/social_default_image.png
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Price of SD government workers' benefits rises
Mitchell South Dakota 120 South Lawler 57301

PIERRE -- The package approved by the Legislature of salary increases, pay adjustments and extra funding to cover a large shortfall in the self-insurance coverage for state government employees will cost in the neighborhood of $47.4 million for the fiscal year that began Monday.

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The single-biggest additional cost of nearly $26.3 million will be for the 3 percent raises and some market adjustments for various jobs, according to a report prepared by the state's central budget agency.

Another $6.1 million is to provide additional increases for employees who are below the midpoint of their job classes. Those raises are up to 3.5 percent in addition to the standard 3 percent raises. This approach began in 1990.

About $2 million will go for pay adjustments to bring classes of employees into line with current markets.

Those adjustments can be up to 4.5 percent.

The insurance program's cost overruns will require approximately an additional $12.3 million from the government to bring the system back into balance. That is approximately $1,615 per benefited employee on a one-time basis.

The system saw a net shortfall of $8.5 million in the fiscal year that ended June 30, 2012. The major reasons were more high-cost claimants -- from 271 to 308 -- and higher costs and usage of specialty drugs.

That deficit essentially carried through the plan in the 2013 fiscal year that ended Sunday.

Details about the overall package were provided to legislators recently by the state Bureau of Finance and Management.

State government is authorized for the equivalent of approximately 13,800 full-time positions. The total budget is $4,090,632,223, of which personal services are $949,244,665 and operating expenses such as payments to businesses, organizations and other governments are $3,136,013,754.

Payments for the increases in the salary and insurance package come from three sources.

State general funds, such as the sales tax, will cover about $17.1 million. Federal funds provide about $10.1 million.

Other funds, which come from a broad variety of sources that range from motor fuels taxes to sportsmen's licenses, will pay the biggest share at about $19.5 million.

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