February 7, 2022

 

Like Medicaid Expansion?  Dislike Medicaid Expansion?

SB 102 – Is a good bill for both sides.

 

SB 102: An Act to create the Medicaid expansion fund and to provide for the receipt of monies received as a result of expanding Medicaid eligibility.  Sponsor Sen. Steinhauer (R-Sioux Falls) Link: https:/sdlegislature.gov/Session/Bill/23034/232563

To understand why SB 102 is good public policy, it is important to have a basic understanding of the Medicaid expansion issue which, tragically, can’t be done in a publication of this length.  It will be attempted as a special report in the near future which will run the risk of having readers never again open an issue of Capitol-ism.

For now, here are basics points that facilitate understanding the purpose of SB 102 and why both sides of the Medicaid expansion debate should support its passage.  First, Medicaid is a government health insurance program for low-income people. 

• Medicaid is NOT Medicare which is a government health insurance program for people 65 years of age and older.
• Medicaid is NOT welfare. No one gets a “Medicaid check” sent to them.  It is insurance, so the payments go directly to medical providers, just like all other insurance payments.
• Medicaid has been available to South Dakota residents for decades.  The program is not new.
• Under Medicaid currently, the cost of treatments are split between the State and the Federal government – on basically a 50/50 basis.
• Currently, Medicaid is available to children and their mothers and some people with disabilities.
• Currently, Medicaid is NOT available to adults who do not have children, regardless of income.  

Now for the confusing part (as if there was nothing confusing about the writing above).  The Federal government has encouraged states to “expand” the pool of those who are eligible for Medicaid insurance.  This includes making it available to people with higher incomes, specifically 138% of the poverty level.  To restate that, Medicaid is available for people who have an annual income that is equal to the federal poverty level and expansion will allow people who made up to 38% more than poverty level to receive Medicaid insurance.

Remembering that Medicaid costs are split 50/50 with the state; the Federal Government offered to pay ALL (100%) of the costs for the new people who would get Medicaid.  Originally, that commitment was for five years and then went to a 90% Federal and 10% State split.  (Note: The costs for regular Medicaid people remains at the 50/50 split that has been part of the South Dakota budget for decades).

South Dakota said NO . . . repeatedly.

So, the question of Medicaid expansion has taken two routes, it has been placed on the ballot as Amendment D and it has been introduced as SB 186 in this year’s legislative session.  SB 186 deals with Medicaid expansion.  It is not important to follow these developments to grasp why SB 102 is a good idea.  Capitol-ism will examine the rabbit trail of Medicaid expansion at another time – in another galaxy.

The concerns and consequences of Medicaid expansion from a fiscal impact on the state’s budget is what SB 102 addresses.  Have you heard of Covid-19?  As part of getting people treated, the Federal government offered extra payments to states that had not expanded Medicaid to encourage them to do so.  And, that is what SB 102 is all about (finally).

Expanding Medicaid now will actually allow South Dakota is save more money than it will cost to cover the people who will be added to the Medicaid program.

SB 102 would create a Medicaid Fund as a depository for the savings or excess funds that will come from the Federal government during the first two years (estimated to be $120 million) of Medicaid expansion.  Senator Steinhauer would like to use those funds to pay the state’s portion of 10% Medicaid costs when the “F-Map” returns to a split of 90% Federal and 10% state costs of the expanded population on Medicaid (estimated to be $30 million per year). 

Supporters of Medicaid expansion should see this as a way of addressing one of the strongest criticisms of expansion and that is the future costs.

Opponents of Medicaid expansion should at least embrace SB 102 as a way to mitigate their top argument and protect the state budget in case they are not successful in stopping Medicaid expansion.   

SB 102 was approved by the Senate Committee on Health and Human Services on a vote of 5-Yea to 1-Nay.  It is scheduled to be voted on by the full Senate later this afternoon (2/07). 

 

School Taxes are the Majority of Your property tax bill – here is an early look at what the General fund portion of the tax bill will look like – the mil levies go down.

SB 59 - An Act to revise property tax levies for school districts and to revise the state aid to general and special education formulas. - Sponsor is the Bureau of Finance and Management.  Link: https:/sdlegislature.gov/Session/Bill/22995/226239

This is the annual “Cutler/Gabriel” adjustment that lowers the mil levy for school general fund taxes.  This is the only levy that has different rates for different classes of property.  Commercial property pays much higher levies than either homeowners or agricultural land.

For all other property tax levies in South Dakota each class of property pays the same levies as all other classes.  This applies to city, county, school capital outlay and mosquito districts. 

The rates in this bill may change as the session progresses.

South Dakota uses the increasing property values to lower tax rates in order to avoid governments getting windfall increases in revenue because of increases in real estate values.

The rates for the initial hearing of SB59 are:

Commercial: From $6.52.5/dollars per thousand – to – $6.25.6/dollars per thousand.

• This is reduction of $0.269 dollars per thousand or 4%.
  
• This mil levy reduction applied to a business with a taxable value of $500,000 decreases the tax for the school general fund from $3,262 to $3,128 a reduction of $134 (4%) (this is not the total tax bill for the property)

Homeowners: From $3.153/dollars per thousand – to - $3.023/dollars per thousand

• This is a reduction of $0.13/dollars per thousand or 4%.
• This mil levy reduction applied to a home with a taxable value of $500,000 decreases the tax for the school general fund from $1,576 to $1,512 a reduction of $64 (4%) (this is not the total tax bill for the property).

Agricultural Land: From $1.409/dollars per thousand – to - $1.351/dollars per thousand

• This is a reduction of $0.058/dollars per thousand (about 6 cents) or 4%.
• This mil levy reduction applied to farm fields and ranch land with a taxable value of $500,000 decreases the tax for the general fund from $704 to $675 a reduction of $29 (4%) (this is not the total tax bill for the property).
  

 

2022 Bill List

Bill	Title
SB 25	provide for the taxation of marijuana.
SB 30	add Juneteenth as a state holiday.
SB 46	protect fairness in women's sports.
SB 53	make an appropriation to increase workforce housing and to declare an emergency.
SB 59	revise property tax levies for school districts and to revise the state aid to general and special education formulas.
SB 65	delineate uses for the South Dakota housing opportunity fund.
SB 70	modify the amount of time to report an injury for workers' compensation.
SB 80	exempt the provision of electricity through electric vehicle charging stations from the definition of electric utility.
SB 89	require insurers to provide coverage for hearing aids and related services to persons under age nineteen.
SB 90	revise certain provisions regarding local building codes.
SB 92	require that taxpayer funded pool arrangements providing workers' compensation coverage demonstrate financial stability, reliable management, and fair pricing.
SB 102	create the medicaid expansion fund and to provide for the receipt of monies received as a result of expanding medicaid eligibility.
SB 114	provide a refund for the contractor's excise tax for certain residential housing projects.
SB 123	provide for certain requirements in the absentee ballot application process.
SB 124	protect the integrity and accuracy of voter registration information.
SJR 502	Proposing and submitting to the voters at the next general election an amendment to the Constitution of the State of South Dakota, providing for wagering on sporting events via mobile or electronic platform.
HB 1005	provide for the designated use of public school multi-occupancy rooms and sleeping rooms.
HB 1006	promote continued fairness in women's sports.
HB 1008	provide a cause of action for certain employees that are required to receive a vaccination as a condition of employment and to declare an emergency.
HB 1039	provide for the assessment of certain agricultural land as noncropland.
HB 1051	amend certain provisions relating to the small business credit initiative fund.
HB 1053	authorize counties to issue bonds for certain expenditures funded by a gross receipts tax.
HB 1064	direct the Department of Education to use certain fall enrollments when calculating state aid for school districts that declined in enrollment between 2020 and 2021.
HB 1073	provide for diploma privilege for admittance to the practice of law.
HB 1093	increase the annual fee for certain electric motor vehicles.
HB 1128	protect the integrity of reemployment assistance.
HB 1147	provide a penalty for businesses that do not accept tribal identification cards as a valid form of identification.
HB 1148	authorize sports wagering within a licensed affiliate business.
HB 1154	reduce the number of years of delinquent property taxes required for a county to issue a tax deed on a property.

 

BUSINESS DAY AT THE LEGISLATURE
Thursday, February 24, 2022

1:30 - Legislative Briefing and Business Caucus
3:30 - Neil Bradley, Executive Vice President, Chief Policy Officer and Head of Strategic Advocacy, U.S. Chamber of Commerce, presenting from Washington, DC
5:00 - Business Day Reception
6:00-6:30 - Program featuring Chamber Award presentations
         
Award Recipients:

• Our Distinguished Legislative Service Award will honor David Knudson from Sioux Falls - Presented by Dana Dykhouse, First PREMIER Bank and past Chair of the South Dakota Chamber Board of Directors
• The Lifetime Achievement Award will be presented to Jim Hood of Spearfish - Presented by Yvonne Taylor, Executive Director, South Dakota Municipal League
• The South Dakota Chamber’s first Outstanding Public Service Award will posthumously honor Jim Soyer for his career spent working as a public employee - Announcement of this presenter is pending

7:00 - Adjourn

Register at https:/bit.ly/3oD5pOR

Business Day is brought to you by the following generous corporate sponsors:

• Amazon
• First PREMIER Bank/PREMIER Bankcard
• Microsoft
• Wellmark Blue Cross & Blue Shield of South Dakota
• Black Hills Energy
• CenturyLink
• MDU Resources Group
• Midco
• NorthWestern Energy
• Sioux Valley Energy
• Steve & Suzie Kirby

• Aberdeen Area Chamber of Commerce
• Brookings Area Chamber of Commerce
• Dakota Valley Business Council
• Deadwood Chamber of Commerce
• Huron Chamber & Visitors Bureau
• Greater Madison Area Chamber of Commerce
• Mitchell Area Chamber of Commerce
• Pierre Area Chamber of Commerce
• Elevate Rapid City
• Greater Sioux Falls Chamber of Commerce
• Watertown Area Chamber of Commerce

Thank you to the following Economic Development offices for co-sponsoring the Legislative Reception:

• Brookings Economic Development Corporation
• Mitchell Area Development Corporation
• Pierre Economic Development Corporation
• Sioux Falls Development Foundation
• Watertown Development Company

Thank you for your support of the South Dakota Chamber of Commerce & Industry.

 

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