SD universities face $6M shortfall

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RAPID CITY — The 5 percent salary bonus that Gov. Dennis Daugaard has proposed for state government employees would apply to faculty, administrators and staff at South Dakota’s public universities.

The problem for the state Board of Regents is how to fully pay for it.

That’s because 59 percent of university salaries come from other sources such as outside funding and student tuition and fees.

The regents will need to come up with $6.2 million to pay their share of the proposed 5 percent bonuses.

Because the governor wants the bonuses paid this spring, the regents don’t have time to adjust tuition, even if they wanted to pass the full cost along to students.

The regents won’t know until possibly late March whether the 5 percent bonus will be approved by the Legislature.

The $6.2 million figure came to light Friday at the regents meeting, during a briefing on the governor’s budget proposal for the university system.

No one offered any comment as regents’ Vice President for Finance and Administration Monte Kramer presented his summary.

But the responses to a reporter’s questions afterward made clear the $6.2 million one-time additional expense has been discussed among the regents, staff and university officials.

Some of the money can be found by reallocating funds within campus budgets, according to Kramer. But where to get the rest will have to be discussed with the Legislature, he said.

Several regents said they’re lost about how to come up with the money.

“We don’t have any idea,” said regent Jim Hansen, of Pierre.

“We’re going to have to swipe it from someplace.”

Compounding the challenge is the governor’s other proposal that calls for an ongoing 3 percent salary increase effective July 1.

Regent Randy Morris, of Spearfish, said tuition and fees need to increase by 4.2 percent to cover the universities’ share of a 3 percent raise. He said salary needs have been the biggest driver of tuition increases that in most years run about 6 percent.

By not giving raises in state government the past three years, the regents were able to hold down tuition increases somewhat, Morris said.

Kramer said the governor’s overall budget proposal would give the regents a one-time sum of $5.9 million extra to offset some past cuts, restoration of $10.3 million on an ongoing basis to replace general funding that was cut in 2009 and was temporarily offset by federal stimulus aid, and a general 0.9 percent increase in ongoing funding of $1.4 million.

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