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Legislators say federal funding uncertainty is forcing budget trade-offs, watch on reserves and one-time money
Summary
State legislators at a Vermillion town hall told residents federal spending changes could force deep state budget cuts and that the Legislature is prioritizing where to spend limited one-time funds rather than using reserves broadly.
Senator Sydney Davis, a vice chair of the Senate Health and Human Services Committee, and members of the District 17 delegation told Vermillion residents that uncertainty about future federal funding is driving difficult choices in the current state budget.
Davis said South Dakota could face large new state costs if the federal share for Medicaid expansion were reduced: "If the federal government says that South Dakota's share of Medicaid is not 10% but 20%, that's $35,000,000 a year more that we're gonna have to come up with." She and other legislators said they are watching possible federal changes closely and planning prioritization exercises for both one-time and ongoing spending.
Representative Chris Cassin, a member of the House Appropriations Committee, described current budgeting steps as a focus on one-time funding and prioritizing programs for ongoing dollars. Cassin said the Legislature currently has about $331,000,000 in one-time revenue and that proposals to use parts of that money have been considered; one proposed transfer to the incarceration construction fund failed in committee earlier, he said. "We're in that process right now on one-time spending," Cassin said.
On the use of reserves, town-hall questioners asked whether the Legislature would tap the state's rainy-day fund to plug holes. Legislators replied that tapping reserves has been discussed but that the larger conversation has centered on whether to reduce the governor's proposed reserve level (11.6–11.8%) to a standard 10%, which would free roughly $35–40 million in one-time dollars.
Legislators stressed limits on their ability to respond to unspecified federal cuts. "We don't know the details of what those cuts are," Representative William Shorma said. He and others said most planning must be reactive, with legislators ready to prioritize or restore funding depending on the federal decisions.
Ending: Lawmakers urged residents to stay engaged as committees finalize appropriation choices. They said further votes and floor negotiations will determine whether one-time funds are used to soften program cuts or whether reserve reductions are needed.
