Appropriations committee approves Department of Social Services budget after heated debate over TANF, rural health and opioid funds

The Joint Committee on Appropriations adopted the Department of Social Services budget and a package of line items after several hours of debate over benefit levels, provider rates and the use of opioid settlement funds.

Representative Nordstrom moved to set the department's budget at the motion-sheet levels. The motion-sheet record in the transcript lists a general-fund total of $685,332,266; the transcript records for federal and other fund totals were garbled in the live record and are not specified in the transcript excerpt. After discussion and a roll call, the committee approved the department budget.

Several individual line items drew extended debate. Senator Voida's motion B12, aligning SNAP waiver funding to the LRC fiscal note, passed 17-1. Representative Mucky's motion B14 sought to restore Temporary Assistance for Needy Families (TANF) benefit levels to pre-rule-change amounts. Sponsors said the motion would return families to prior monthly benefit levels (examples cited in committee: family of three roughly $696 before cuts, $626 after; family of four roughly $781 before, $703 after) and commit ongoing general funds rather than a one-time payment. Opponents, including Senator Howard, urged resisting the change because the legislature had previously voted to reduce general-fund maintenance-of-effort and implement cuts through rules. After debate and questions about whether the restoration should be ongoing or one-time, the committee approved B14 on an 11-7 vote.

Lawmakers also approved adjustments intended to support rural providers. Motion C13 (critical access hospital protections) passed 13-5; sponsors said it would hold small rural hospitals harmless during a rebasing process. Motion C14 increased reimbursement rates for federally qualified health centers (FQHCs), with supporters warning that some centers were reimbursed at roughly 60% of costs and could close without higher rates; C14 passed 15-3.

The committee considered multiple measures related to opioid settlement funds. Bureau of Finance and Management staff reported about $24 million received to date, roughly $12 million already allocated or obligated, and ongoing receipts of approximately $4 million per year. Committee members discussed timing, prioritization and whether to approve authority to commit funds now. Representative Nordstrom and others advocated granting authority so jurisdictions with existing programs (notably Rapid City and Sioux Falls) could proceed; opponents argued the committee should not prioritize a few communities or commit funds not yet in hand. A motion to give broader immediate authority for two large project grants (E12 and E13) failed 2-16. A narrower motion E14 to provide roughly $9 million in other-authority to continue the grant program passed 17-1. DSS Secretary Matt Olaf told the committee the department is "learning as we go" and that additional rounds of transformative grants are planned.

The committee recessed after approving the Department of Social Services motion-sheet budget and the line items.