PIERRE, (KCCR) — South Dakota budget officials say the state’s finances remain solid, but growth has slowed. After several years of rapid increases following the pandemic, general fund revenue is essentially flat this year. To balance the budget, the governor’s proposal draws nearly ninety-eight million dollars from reserve funds, while still leaving more than three hundred million dollars in savings. Bureau of Finance and Management Commissioner Jim Terwilliger says the slowdown reflects a return to normal…
The largest pressure point remains Medicaid. It now accounts for about thirty percent of the state budget. Costs are rising as enrollment and use increase, and as South Dakota pays a larger share under the Federal Medical Assistance Percentage, the formula that splits costs between the state and federal government. Terwilliger sys South Dakota’s economy is pushing that share higher..
School funding is also shifting this year. State aid is dipping slightly because student enrollment is down. Lawmakers will spend the coming weeks reviewing agency budgets and weighing one-time spending decisions. Budget targets are expected to be finalized later this session.
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