Noem’s Budget Adjustments and Emergencies Push Federal Share of State Spending in FY 2022 over 50%

On Thursday, I reported that liberally spending Kristi Noem is proposing a Fiscal Year 2023 budget that relies on federal dollars for 38.8% of its revenue. I noted that the current year’s budget gets 35.8% of its funding federal socialist redistribution of wealth.

But the Governor’s budget recommends $1.99 billion dollars in upward adjustments to this year’s budget and special “emergency” appropriations that boost South Dakota state government’s current dependence on Uncle Sam to over 50%.

The amendments to the FY2022 general appropriations bill alone actually cut state general fund outlays by $65.5 million. But the two largest cuts—$49.2 million from state spending on Medicaid and $39.1 million from payroll for public health and safety—are largely made up for by adding $86.4 million in federal assistance made possible by coronavirus. (Hey, is it possible Kristi Noem is prolonging the pandemic with her refusal to promote masks and vaccines and her anti-science misinformation because more coronavirus brings more federal coronavirus cash?)

Noem proposes spending $25.3 million more in state money and $41.2 million more from the feds to cover more South Dakotans who’ve become eligible for Medicaid… which raises two questions:

1. If we have “the strongest economy in America,” how come more people are falling into Medicaid eligibility?
2. If we can afford to come up with $25.3 million from the state coffers to cover more people under current Medicaid rules, why can’t we come up with $32.6 million to expand Medicaid that would (a) cover another 42,500 South Dakotans, (b) draw another $264.5 million in federal funding (thank you, Presidents Obama and Biden) to send our healthcare economy skyrocketing, and (c) produce $63.6 million in general fund savings?

The $65.5 million net reduction of state general fund outlays is tempered by $18.7 million more in other state revenues (more than half of that boost comes from license plates reissuance—we must be plating a lot of RVs) and then thirteen-tuply swamped by $859.0 million in additional federal spending. 72% of that—$622.7 million— is pure covid relief booster to be spread out across state agencies. The next biggest chunk, $80.7 million, comes straight from President Biden: the American Rescue Plan’s 10% enhanced FMAP (federal medical assistance percentage—more Medicaid!) will help us spend more on home- and community-based services. South Dakota was the last state to submit a request for this funding, and the plan submitted asks for $70.8 million, not $80.7 million. So either President Biden just threw us an extra $10 million out of the goodness of his heart, or Noem’s budgeteers flipped some digits when typing up the budget.

Noem then asks for another $886.1 million in federal spending authority for “emergency” special appropriations, items outside the FY 2022 general appropriations bill. $600 million would support environmental projects—mostly all those water systems that thirsty communities are clamoring for. Noem wants Uncle Sam to pay $69.6 million for a new public health lab in Pierre, $60.0 million to improve water and sewer infrastructure at state facilities, $50 million to build sewers for cheaper new houses, $50 million to build more rural broadband, and $29.5 million in American Rescue Plan funding to demolish Lincoln and Briscoe Halls at Northern State University and replace them with a new facility for Admissions, the School of Business, and the SDSU Accelerated Nursing program. (Let’s see if NSU President Neal Schnoor invites Joe Biden to attend the ribbon-cutting alongside Noem, Al Novstrup, Carl Perry, and Drew Dennert to celebrate this 100% federally funded investment in Aberdeen.)

When we combine adjustments to general appropriations and the emergency specials, Noem is asking for $1.993 billion in new spending between Session and June 30. 87.5% of that spending, $1.745 billion, would come from the federal government. That’s on top of $1.829 billion in federal spending authority already in the FY 2022 budget. Noem is thus asking the state to spend $3.574 billion in federal money in this fiscal year and a grand total of $7.108 billion.

In other words, if the Legislature approves Noem’s requests for budget adjustments and “emergency” spending in toto, Uncle Sam will be covering 50.28% of South Dakota’s FY 2022 budget.