PIERRE, S.D. — The 13,000 employees who run the South Dakota state government are set to earn raises of at least 7%, with more than one-third of these roles getting higher, targeted raises in hard-to-fill and longer-tenured positions.
The 2024 fiscal year, when these increases officially take effect, begins July 1.
“It’s certainly a positive stroke for our employees, both with the increase the Legislature gave and then with targeted dollars,” said Sen. Jean Hunhoff, of Yankton. “Hopefully this will incentivize them to continue to remain with the state government and indicate that we do see they're very vital to our organization.”
After the 7% across-the-board raise and the promise of about $30 million extra in targeted injections made headlines at the close of the 2023 legislative session in March, Darin Seeley, the commissioner of the state Bureau of Human Resources, offered state lawmakers a complete breakdown of this investment during a meeting of the interim budget committee on May 3.
In addition to helping recruit new employees with salaries that better reflect their experience, Seeley said the targeted increases among longer-tenured employees are a key part of helping keep workforce challenges at bay by potentially keeping older state employees in their roles longer.
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“Longer-serving employees are now paid at rates that are different from those of new employees, enhancing our ability to retain employees,” Seeley said. “Assuming that other often more important factors like organization, culture and supervision are good, people closer to retirement might even consider holding off that retirement because of this change in the pay rate.”
In total, the targeted increases are headed to at least 4,700 employees. Some departments have not released full numbers yet.
A department-by-department breakdown shown during the budget hearing indicates that the largest gross shares of the $31.4 million in targeted increases are headed to the Department of Social Services and the Department of Transportation, with investments of $5.5 million and $3.4 million, respectively, though nearly half of the investment in DSS is coming from federal funding.
By percentage, the highest raises are going to the Department of Public Safety, the Department of Information and Telecommunications and Game, Fish and Parks, with across-department average increases of nearly 15%. Seeley told lawmakers that no positions in state government would earn raises of more than 20%.
One issue beginning to be addressed through these increases is the number of state employees in South Dakota earning below market value.
In the current fiscal year, about 85% of state employees are below this midpoint, which is set annually for different experience levels by the Bureau of Human Resources. In the coming fiscal year, the number earning below this midpoint will drop to 60%.
For Eric Ollila, the executive director of the South Dakota State Employees Organization, it’s a welcomed change, but also a reminder that there is work to be done in subsequent years.
“They're getting caught up somewhat. But what they have missed is the opportunity for those funds that they really should have had over the years. They're missing accumulated interest in their savings accounts and in retirement accounts,” Ollila said, noting that over the past 15 years state employees have left many legislative sessions without raises. “This can't be a one-year and let's forget about it now kind of thing.”
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Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or jharward@forumcomm.com.
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