S.D. governor: State can’t rely on federal money

PIERRE, S.D. — South Dakota cannot rely on getting additional federal stimulus money to help balance next year’s budget, Gov. Mike Rounds said Thursday.

Rounds said he and the governors of more than 40 other states have asked Congress to extend higher federal Medicaid payments for another six months, which would give South Dakota an extra $26 million in federal funds to replace state money next year. But he said the Legislature will have to pass a state budget in a couple of weeks without counting on any extra federal help.

The federal government pays about two-thirds of the cost of Medicaid, a program that pays the medical bills of low-income people. The state pays the other third, but the federal share has been increased temporarily as part of the stimulus program.

Rounds said the odds are no better than even that Congress will extend the higher federal payments.

The Republican governor talked about the budget during his weekly news conference after Republican and Democratic legislative leaders continued their sparring over how to balance the budget for the year that begins July 1.

Rounds’ proposed budget calls for using $32 million in reserve funds, but Republican legislators have said they want to cut $40 million from the GOP governor’s plan to avoid using reserves next year.

The leaders of the Democratic minority complained that Republicans have failed to accept any Democrats’ ideas for balancing the budget.

Senate Democratic Leader Scott Heidepriem said limiting the growth of state government is key to balancing the budget. South Dakota has added the equivalent of about 1,500 full-time state employees during the Rounds’ seven years as governor, and the public supports limits on government, Heidepriem said.

“It’s pretty clear that folks out there believe state government is larger than it needs to be,” he said.

The governor has said two-thirds of the added state employees have been at universities, which have to provide teachers and other services as enrollment grows. Most new employees have not been funded with state general tax dollars, but instead are paid with federal and other funds, he said.

Heidepriem, who is running for governor, and House Democratic Leader Bernie Hunhoff of Yankton criticized Republicans for waiting so long to reveal any budget-cutting plans. The main run of South Dakota’s legislative session ends March 12, and lawmakers expect to pass a budget by then.

Senate Republican Leader Dave Knudson of Sioux Falls, who also is running for governor, said the GOP majority expects to finish work on its budget plans within a week or so. The budget plans could not be devised until the Joint Appropriations Committee completed hearings with all state agencies.

Knudson and House Republican Leader Bob Faehn of Watertown said they believe they can cut $40 million from the budget, but declined Friday to discuss any details.

“It’s very challenging. It’s going to take some time,” Knudson said. “I think we’re going to get there.”

However, Rounds said he still thinks lawmakers will have a tough time cutting his budget.

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