South Dakota will not be able to get an expected $36 million in extra federal aid if the Legislature balances the state budget by cutting spending, Gov. Mike Rounds said Friday.

If the budget is balanced through spending cuts, the state couldn't prove it needs the additional federal aid, Rounds said. And the state couldn't accept the money just to put it in a savings account for next year, he said.

"We would have to show a need for that in order to balance our budget," Rounds said as the Joint Appropriations Committee began a detailed hearing on proposed changes to the budget.

The governor's comments illustrated the uncertainty surrounding the extra federal aid.

The U.S. Senate on Wednesday approved a measure that would give states extra money for Medicaid, which pays for medical care for poor people. Legislative leaders hope the House will also approve the bill by the end of March, when lawmakers must pass a state budget for the year beginning July 1.

The main run of this year's legislative session ended Friday. But after other lawmakers left town, Joint Appropriations Committee members met to begin considering changes to the spending measure.

The committee planned to delay a final vote on the budget until March 29, when the Legislature returns to the Capitol for a final day to consider any vetoes by the governor.

In December, Rounds proposed using $32 million in reserves to balance next year's state budget, but lawmakers in both parties said they wanted to cut spending to avoid using reserves.

The Republican governor said he hopes Congress gives final approval to the extra Medicaid assistance by the time the Legislature passes the state budget March 29. If Congress hasn't finished the measure, Rounds said the state should pass a budget based on spending reserves, which would show the state needs the extra federal money.

The federal government pays roughly two-thirds of Medicaid costs, with the state picking up the rest. Last year's stimulus measure increased the federal share through Dec. 31 to help states deal with budget problems. The bill passed by the U.S. Senate would extend the extra federal funding for Medicaid through June 30, 2011, providing South Dakota with an additional $29 million.

The state also is getting an additional $13 million in other federal money, which is also tied to Medicaid.

Republicans announced a week ago a $50 million package of spending cuts and other actions to balance the budget without using reserves. Senate Republican Leader Dave Knudson of Sioux Falls said if those cuts aren't made this year because of the extra federal aid, they can be made next year.

Knudson and House Republican Leader Bob Faehn of Watertown said South Dakota cannot turn down the extra federal aid because it would otherwise go to other states.

"When the check shows up with your name on it, how do you justify to your taxpayers that we're going to send it to California or elsewhere and our grandchildren and their grandchildren will have to help pay that bill?" Faehn said.

Democratic legislative leaders said they also support using the extra federal money to balance the budget, but they continued their call for long-term changes aimed at restraining state-government growth.

For example, Democrats have proposed limiting general state spending growth to the rate of inflation, up to 3 percent.

Senate Democratic Leader Scott Heidepriem of Sioux Falls said the growth of most agencies in state government should be limited so more money is available for schools.

"We should reduce the size of government, making it smaller, smarter and more accountable," Heidepriem said.