SD governor proposes pay raise for state workers

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PIERRE, S.D. (AP) — Rising tax collections mean the state can afford to boost spending on schools and health care while giving state employees a long overdue pay raise next year, Gov. Dennis Daugaard said Tuesday as he proposed a $4 billion state budget to the South Dakota Legislature.

Daugaard, a Republican, and the GOP-controlled Legislature last winter made deep cuts in education, health care and other programs to fix a $127 million shortfall for the current budget year. Daugaard on Tuesday proposed what he called modest spending increases in those key programs for the budget year beginning next July.

Daugaard's spending plan includes 4.5 percent increases in state aid to school districts, state spending on universities and technical institutes, and reimbursements to nursing homes, clinics and other facilities that provide health care to poor people in the Medicaid program. But much of the increased spending in those programs would be one-time additions that would not be built into the base of ongoing spending expected in future years.

The governor also proposed a 3 percent across-the-board pay raise for state employees, whose paychecks have been frozen for the past three years because of budget problems. State employees also would get a one-time bonus equal to 5 percent of their annual salaries to partly offset their loss in purchasing power due to inflation in the years they got no raise.

In addition, Daugaard proposed amending the South Dakota Constitution to require that the governor propose and the Legislature pass a balanced state budget every year. Officials have long said the state constitution requires a balanced budget, but those words are not actually in the document, which instead limits state debt and provides for taxes to wipe out any deficit.

Daugaard's proposed budget calls for the state to spend more than $4 billion in state, federal and other funds in the year beginning July 1. The portion from state general tax funds would exceed $1.2 billion, up more than $100 million from this year.

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