Proposed Budget - Fiscal Year 2023
South Dakota Governor Kristi Noem released her fiscal 2023 budget proposal on December 7. The recommended budget calls for $5.71 billion in total spending, a 11.6 percent increase from fiscal 2022’s budget amount. General fund spending is recommended at $1.97 billion, an 8.7 percent increase from the budgeted amount for fiscal 2022. While the recommended total spending and general fund spending amounts are higher than the budgeted amounts for fiscal 2022, they are both lower than the revised spending levels for fiscal 2022. The largest categories of general fund spending are health and human services (36.3 percent); state aid for education (34.5 percent); higher education (12.1 percent); and corrections (5.8 percent). Total fiscal 2023 general fund increases are $157.3 million, with the largest increases going towards state aid ($47.4 million), social services ($44.2 million), employee compensation ($28.0 million), and human services ($24.3 million). General fund receipts in fiscal 2023 are projected at $1.98 billion, a 7.0 percent decline from fiscal 2022’s revised level. The total estimated reserve balance is $279.1 million, or 14.2 percent of proposed fiscal 2023 general fund appropriations.
Proposed Budget Highlights
In discussing her recommendations for the remainder of fiscal 2022 and fiscal 2023, the governor noted total general fund receipts for fiscal 2022 are up 11.4 percent over fiscal 2021’s historic numbers. Additionally, she said in addition to American Rescue Plan Act (ARPA) funds, there are $215.5 million in one-time general fund dollars available for fiscal 2022 and $157.6 million in ongoing general funds. The governor said the state will put those funds to use to address the state’s most pressing needs, and to make fiscally responsible one-time expenditures. The governor highlighted key funding initiatives to invest in South Dakota’s workforce, build infrastructure for the future, and strengthen public safety. Funding recommendations include:
Investments in South Dakota’s Workforce
- $150 million in state general funds for workforce housing, plus $50 million in ARPA dollars for matching sewer projects.
- 6 percent inflationary increases to state employees, education, and healthcare providers.
- $100 million in ARPA dollars received directly by the Department of Social Services for childcare grants.
- $30 million in one-time state general funds to facilitate new cybersecurity training at Dakota State University.
- $17 million in one-time state general funds to enhance workforce training capacity at technical colleges.
- $35 million in ARPA dollars to the Department of Tourism to facilitate tourism and workforce marketing efforts.
- $2.5 million in ongoing state general funds to expand the Bright Start program for eligible mothers statewide.
Infrastructure Projects for the Future
- $660 million in ARPA funding for statewide water projects.
- $6.5 million in one-time state general funds for dam repairs.
- $5.6 million in one-time state general funds to repair public recreation areas damaged by 2019 floods.
- $69.6 million in ARPA Capital Projects Funds to build and remodel the State Public Health Lab.
- $10 million in one-time state general funds to create 175 new campsites in Custer State Park.
Efforts to Strengthen Public Safety
- $28 million in state general fund reserve funds to build a new Department of Corrections (DOC) Community Work Center for Women.
- $2.1 million in state general funds for targeted pay increase for DOC employees.
- $15 million in ARPA funding to construct regional mental health crisis management centers across the state.
- $24 million in total funds for a comprehensive reform proposal for EMS and first responders.
- Funding to respond to emerging threats, like human trafficking, drugs, crimes against children, Medicaid fraud, and cyber threats.
- Improvements to National Guard Readiness Centers.