How South Dakota collects and spends money should reflect its citizens’ shared values — the consensus about needed public services and how they should be financed. That belief prompted a facilitated community dialog process by the South Dakota Budget & Policy Project. Called South Dakotans Talking, it brought together 475 individuals in 16 communities across the state in late 2011.

Those who took part represented health care, public education, city government, nonprofit organizations, current and retired business owners and volunteers. Invited to attend as listeners, more than half of state lawmakers were present at one of the two-and-a-half hour session.

Participants first learned about state budget basics, then took part in nonpartisan budget discussions. Joy Smolnisky, who directs the South Dakota Budget & Policy Project, said the process demonstrated the ability of groups who don’t always agree to respectfully find areas of consensus.

“Reaching consensus about which state services we value and how we want to pay for them is the hard work of democracy,” Smolnisky said. “Public support for state and local fiscal policy increases when citizens have the opportunity to understand, discuss and have input on options.”

Residents followed a similar format in every community that allowed them to anonymously select from among the following topics for discussion:

• State budget formation process,
• K-12 education,
• Higher education,
• State revenue,
• Medicaid,
• Other

The sessions were hosted by local organizations, such as Chambers of Commerce or Community Based Services. 

According to the South Dakotans Talking report (available at www.sdbpp.org), the top discussion topics across all sessions were state revenue, K-12 education and Medicaid.

Cross-topic themes visible across all the discussion topic tables in order of frequency were:

1. Find new revenue
2. Re-examine consumption tax exemptions regularly
3. Levy a sales tax on internet sales
4. Support the initiated measure for a 1% sales tax increase dedicated to K-12 education and Medicaid

Citizen ideas and suggestions are summarized in Appendix C, pages 39-40 of the report.

Following the sessions, nearly 95 percent of those who took part indicated they had a much better or somewhat better understanding of the budget process. That assessment has prompted Smolnisky to expand South Dakotans Talking to other communities. She can be contacted at 605 367-9667 to schedule a session to learn about state budget basics and begin a consensus-building discussion.  

Ellie Haerter of the Bush Foundation, a project funder, said her organization supports opportunities like South Dakotans Talking because “people understand better than anyone the current and future needs of their communities. The collective wisdom that came out of these community meetings can serve as a guide to the elected state leaders who bear the responsibility for ensuring a vital and stable future for South Dakota citizens.”

The Northwest Area Foundation also provided funding.

Click for link to table

Click here to access a pdf of the South Dakota Talking Report

Repeating their practice of last year, the Joint Appropriations Committee has published on its internet site the Proposed Amendments to the General Appropriations Bill for FY13 (SB197).    The Legislative Research Council posted the full list of amendments as well an the individual wording for each amendment on the Appropriations web page for public access late Monday afternoon.

Legislative rules do not require Internet publication of the amendment packet, but co-chairs Senator Corey Brown and Representative Dean Wink have made deliberate efforts to ensure improved constituent access to proposed amendments both last year and this year.

The publication of the proposed amendments is the first opportunity the public has to review the alternative proposals to the portions of the Governor’s budget contained within the general appropriations bill.  Even with the prompt publication, the public has a limited time frame within which to provide feedback to their legislators and appropriations committee members.   The appropriations bill, and its amendments, are schedule for a hearing on Wednesday, February 29 at 9:00 am [although Chair Corey Brown has cautioned the hearing may need to be delayed until later Wednesday or Thursday morning should relevant conference committee issues remain unresolved].  The final budget must be approved by end of day Friday, March 2, 2012, unless the legislators choose to extend the session.

Legislators have submitted 37 proposed amendments, the Bureau of Finanace and Management has submitted five  proposed amendments and the Unified Judiciary System and Legisaltive Audit have each submitted one amendment.

Amendments address a range of funding alternatives, including proposed funding changes in education, medicaid reimbursement, court services, post secondary education and many others.  The name of the legislator or agency sponsoring the amendment is listed with each amendment.

Friday morning Joint Appropriations chair Senator Corey Brown described his anticipated timeline for appropriations actions during the final week of session:

• Monday noon (2-27-12) – Amendments to general appropriations bill due to Legislative Research Council.  Only legislators or agencies can submit amendments.
• Late Monday – amendment packet available to legislators and public.  The LRC currently expects to post the amendments on-line under Agency Hearing Budget Materials.  Look for a tab across the top labeled Amendments SB197
• Wednesday 9:00 am Rm 414 (2-29-12) Joint Appropriations public hearing on amendments.  Senator Brown cautioned that this hearing might be delayed to later on Wednesday or early Thursday if other major spending bills remain unresolved.  Typically, this hearing affords an opportunity for members of the public to testify on proposed amendments to the Governor’s budget proposals.
• Friday (3-2-12) Amended Appropriations Bill sent to house and senate floor for consideration and action.

Revenue projections adopted by the Joint Appropriations Committee on Friday 2-24-12 reflect an expected increase over those contained in Governor’s proposed budget. 

Bottom line?  The legislature expects an $12.1 million additional revenue in the current fiscal year (FY12) and an additional $9.7 million in FY13.  This offers the legislature some additional dollars to work with in their last week of session.   How ought these dollars be used?

• Backfill cuts imposed last legislative session in areas such as education, medicaid and the judiciary?
•  Fund new initiatives in economic development?
•  Lower existing taxes or fees?
•  Or, should the dollars be allowed to revert into the budget reserve fund?   

This is the last weekend citizens will have to provide input to their legislators before the end of legislative session 2012.  All final budget bill amendments are due by noon on Monday, 2-27-12.

Two bills have been introduced that have the potential to impact information flow in the South Dakota state budget process. 

The first (HB1133) creates a formal mechanism for the legislature to research and conduct long term planning on a bipartisan basis.

The second (SB151) requires a minimum 24 hour time lapse between passage of the final amended appropriations bill and floor voting on the budget.

HB 1133:   An act to establish the Legislature’s Planning Committee.  This bill has passed the House State Affairs 2-6-12.

Analysis:  The bi-partisan committee’s charge under this bill is to make a continuing study of emerging trends, assets, and challenges in South Dakota and to address the long-term implications of the decisions made by the Legislature.  Such a planning mechanism creates the opportunity for multi-year bi-partisan legislative study and planning.   It also allows an opportunity public input and public access to the findings of the committee. Excerpt from bill language: 

“collect and analyze data and give special consideration to matters concerning demographics, education, labor, revenue, natural resources, assets, challenges, trends, and the growth and efficiency of government in South Dakota. The committee shall continuously identify long-term issues significant to South Dakota, set goals, and issue a yearly report of its findings. The committee shall draw upon public input from all those who may be concerned and knowledgeable in these areas. The committee may propose draft legislation and policy recommendations to the Legislature to effectuate its mission.”

SB 151:  An act to provide a time period before certain action on the general appropriation bill may commence.  Scheduled for hearing in Senate Appropriations Wednesday, Feb 8, 2012 15 minutes after final Senate adjourns.

Analysis:  The delay created by this bill would allow time for the public and legislators to read and discuss the final amended version of the appropriations bill before voting.  Excerpt from bill language:

“No action may be taken on the floor of the House of Representatives or the Senate relating to the second reading of the general appropriation bill unless twenty-four hours have elapsed since the committee engrossed version of the bill was made available to the members of those bodies.”

SB151 Creates a time period before voting on the general appropriation bill – Analysis

SB 194  Tax refunds for elderly people and people with a disability – Analysis

HB 1133 Establishes a legislative planning committee – Analysis

HB 1214 Food tax sunset – Analysis

HB 1216 Food tax swap – Analysis

HB 1206  Sales tax on food refund program – Analysis

On 2-7-12 the South Dakota House Taxation committee will look at two bills using different approaches to removing state sales tax from groceries. 

HB 1214 proposes a food sales tax sunset, using 1/2 cent decreases to phase out the current 4 cent sales tax.  The 1/2 cent decrease would not occur unless the states sales tax revenues increased 6% over the previous year AND at least 3% over inflation.  Once a decrease was triggered, it would stay in place permanently.  A subsequent year of high state tax revenues would trigger another 1/2 cent decrease in food taxes - potentially leading to the eventual elimination of the state sales tax on food.  State revenue lost secondary to each 1/2 cent sales tax on food decrease would be approximately $8 million. See HB 1214 Food Tax Sunset for more details. 

 HB 1216 proposes a food sales tax swap, removing the 4% state sales tax on food and simultaneously increasing the state sales tax on other goods and services by .35 cents, to make the action revenue neutral.  See HB 1216 Food Tax Swap for more details.

Senate Appropriations Committee is scheduled to hear SB 194 Thursday morning, 2-2-12.  South Dakota has a long-standing program that provides sales and property tax relief to the elderly and disabled poor.  Program eligibility is determined by a fixed dollar income amount, not an amount adjusted for inflation, such as the Federal Poverty Index (FPI). 

Because eligibility increases have not kept up with inflation, the number of households able to take advantage of the program has eroded over time.  Fifteen years ago the program was helping almost 5,700 households with almost $1.2 million of relief.  By FY 11 the resources distributed through the program had fallen by over 50%, dropping to less than $500,000 and helping only 2,392 households.  In 1990, elderly and disabled with incomes at 143% of the FPL were eligible for the program.  Today, even with the increases proposed in SB 194, South Dakotans won’t qualify unless their incomes are below 94% of the FPL (for singles) or 91% of the FPL (for households of two).  According to census data over 12,000 South Dakota elders are living in poverty. 

To be eligible, applicants must have an annual household income below $10,500 for single individuals or $13,750 for households.  Over 80% of the applications denied for this program (1,663 applicants denied between 2002 and 2010) were denied based on income eligibility.

The mission of the South Dakota  Budget & Policy Project, which began in 2010, is to promote responsible and equitable fiscal policy through research and education. 

Link to:

Northwest Area Foundation grant announcement

Sioux Falls Argus Leader coverage of grant award