Makenzie Huber/South Dakota Searchlight – Legislators spent long hours last summer digging deep into specific issues deemed potential priorities for the 2024 legislative session, including long-term care, funding for county governments and legal representation for low-income defendants.
During her budget address last week, Gov. Kristi Noem did propose a 4% increase in state reimbursement to health care providers, including nursing homes, and she also proposed the creation of a statewide indigent legal defense commission. But she omitted other big-ticket recommendations from the summer studies that would affect the state’s budget.
That leaves legislators to figure out how Noem’s “meat and potatoes” budget aligns with their own priorities, said Rep. Roger Chase, R-Huron. The annual legislative session begins Jan. 9 at the Capitol in Pierre.
“The governor gave her proposal and the Legislature will come up with legislation we’re comfortable with, and then we’ll see where it goes,” Chase said. “When it’s all said and done, we’ll have a legislative session where we can work together and come up with positive funding for all of South Dakota.”
‘A very small step’ for county funding support
Noem’s proposal for a statewide indigent legal defense commission was a recommendation from the Indigent Legal Services Task Force that also addresses one of the largest concerns from the county funding summer study. The proposed commission would cost the state an estimated $1.4 million a year, which would save counties an estimated $1.5 million to $2 million a year — saving South Dakota taxpayers a net of up to $600,000.
Currently, counties bear the entire burden for providing public defenders or paying for court-appointed attorneys for criminal defendants who can’t afford a lawyer. As envisioned by the task force, a state commission would pick up criminal appeals filed by defendants who’d been represented by county-funded lawyers at the trial level, and would handle appeals in abuse and neglect cases. The commission could also study and recommend joint state-county funding structures, seek grants for public defense, audit bills from private attorneys who contract with counties for indigent legal aid, and create and monitor caseloads statewide.
House of Representatives Majority Leader Will Mortenson, R-Fort Pierre, said the state commission addresses the most important county expense that can be handled more effectively and efficiently by the state. Mortenson served on the task force this summer.
“It’s an opportunity to provide legal services in a better way to folks who flat out can’t afford it. That’s a constitutional right,” Mortenson said. “In South Dakota, we want to make sure you have the right to a competent attorney, make it accessible across the state and not bankrupt counties.”
Some legislators don’t think the proposal goes far enough. The county funding summer study committee recommended a bill that would set a cap on indigent defense costs for counties, saving them millions of dollars more per year.
Sen. Randy Deibert, R-Spearfish and vice-chair of the county funding summer study, said he was disappointed in the budget proposal.
“I was expecting a small step and we got a very small one,” Deibert said. “It’s a great concept, and I’m really happy we got what we got, but I was expecting we’d get some more.”
Another top recommendation put forward by the county funding summer study was the creation of local government cybersecurity grants. Noem’s administration has turned down federal funding for grants twice. Deibert still plans to bring a bill forward on the issue.
Chase, who was chair of the county funding summer study, said most of the bills recommended by the group will still be introduced during session and won’t impact the state budget. He added that legislators are working with Noem’s administration to work out differences on how to address indigent legal defense costs.
“We feel good about where we’re headed,” Chase said. “We just have to work with the Governor’s Office to get details worked out.”
Tuition freeze as a workforce retention tool
Noem mentioned a public university tuition freeze and long-term care in her budget address to legislators, saying some of them might support more money for those items “instead of helping some providers” such as community service providers and developmental disability providers. She proposed a 4% increase in state funding to those providers as well as nursing homes, state employees and K-12 education — something many legislators welcomed.
But House Speaker Hugh Bartels, R-Watertown, is optimistic about finding funds for another tuition freeze.
For several years — even before the pandemic — when the Legislature’s budget committee conducted its revenue adjustment, there was an increase in revenue projections rather than a decrease. If that trend continues, that’ll free up some money.
“I think a tuition freeze will be one of the top two or three things we look at then,” Bartels said. “I think that’s a high priority if there’s additional revenue we think we’re going to get.”
This might be the year that bucks that trend though, Mortenson said. Noem has been outspoken about the need to be fiscally responsible and conservative this session as the state spends the last of billions in federal pandemic aid it received during the past several years. As of October 2023, the state’s ongoing general fund revenue was up 12% compared to the prior year.
The South Dakota Board of Regents indicated at a meeting earlier this year that a tuition freeze would be its main request of the Legislature and Noem this session. A tuition freeze would cost an estimated $4.2 million.
Regents President Tim Rave told Mortenson and Sen. Casey Crabtree, R-Madison, during the board’s meeting in Brookings on Thursday that the board would want to discuss a tuition freeze if there is extra money found during session.
Tuition and fees at South Dakota universities have increased 1.1% over the last four years while Minnesota and Montana universities have seen a 10% increase in that time and Wyoming has seen over a 15% increase, Regents Executive Director Nathan Lukkes said during the meeting.
Combined with the expansion of in-state tuition for out-of-state students from surrounding states, the state’s university system has seen an increase in enrollment numbers and the number of out-of-state students who choose to stay and work in South Dakota after graduation, Lukkes said. Nearly 800 out-of-state South Dakota graduates remained and worked in-state last year, he added.
“You can see this is working,” Lukkes said. “It’s moving the needle.”
Mortenson told South Dakota Searchlight that affordable higher education is a “proven way of recruiting young people to the state, keeping them in the state and bolstering our workforce.”
“It’s easier to recruit an 18-year-old from out of state than a 45-year-old with a mortgage,” Mortenson added. “That’ll be a priority of mine and others in the caucus who see workforce retention — or attracting and retaining young, hardworking folks — in a tuition freeze.”
Slow Medicaid enrollment could open up funds
Bartels served on the long-term care summer study, which came out with recommendations including a $5 million technology grant for nursing facilities and a proposal to expand Medicaid to palliative care, which could cost between $1.23 million and $3.55 million.
Bartels is skeptical about the the need for the high price tag on the technology grant, but hopes there will be some extra Medicaid money available this session to address some of the summer study’s proposals.
Medicaid enrollment dropped substantially this year after the expiration of federal pandemic requirements, and re-enrollment after voter-approved Medicaid expansion has been slow, which could free up some more money in the budget.
“That number is up in the air, so we might be able to absorb it,” Bartels said.
Competition for one-time funds: prisons or other priorities
Overall, Bartels expects each priority will get a little bit of what it needs.
He agrees with Noem’s proposal to place about a quarter-billion in additional funds into the state’s new prison projects, which could save millions of dollars in interest by not bonding for the projects.
Construction of the additional women’s prison in Rapid City is underway, but Noem said last week “there is a $27 million shortfall to build this facility with the space and programming that it needs.” The proposed men’s prison in rural Lincoln County — which would largely replace the antiquated penitentiary in Sioux Falls — is mired in controversy over its location.
Noem told the Dakota Scout recently that she would “be up there kicking and screaming” if legislators made amendments to prison funding in her proposed budget.
“That’ll be the competition there,” Bartels said. “How much do we put in the incarceration fund versus other one-time ventures?”