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The South Dakota Capitol building in Pierre.

With a statewide blizzard looming, legislators stayed through Tuesday night into early Wednesday morning to pass a $4.9 billion Fiscal Year 2020 budget.

Senate Bill 191, the General Appropriations Act, passed the Senate by a 27-2 vote and the House 53-6. The budget goes into effect in July.

"In South Dakota, we do these things the right way," said House Majority Whip and co-chair of the Joint Committee on Appropriations Rep. Chris Karr, R-Sioux Falls. "This bill provides a structurally balanced budget for FY 2020 and the ongoing expenses are supported by ongoing revenue."

Nursing homes emerged as the clear winners of budget negotiations. After weeks of discussion among legislators about the state’s nursing home crisis, legislators granted nursing homes the most substantial funding boost percentage-wise.

State Medicaid reimbursement rates for nursing home providers will increase by 10 percent under the approved Fiscal 2020 budget.

Additionally, the Legislature passed Senate Bill 180, amending appropriations for the remainder of Fiscal Year 2019. Nursing homes will start seeing increased reimbursement rates as soon as April.

South Dakota's reimbursement rate is the lowest in the nation at $146 per day, while the average daily cost to house a nursing home patient is $181 per day. Over the years, those missing dollars have added up, and nursing homes throughout the state have closed.

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The increase, however, doesn’t close the gap completely. Nursing homes still won’t be reimbursed 100 percent for their Medicaid patients, but they will be closer to full reimbursement.

“Is (the increase) going to solve the problem entirely?” Joint Committee on Appropriations Co-Chair Sen. John Wiik, R-Big Stone City, said on the floor Wednesday. “No, but it’s a good start.”

The Legislature’s increase for nursing home funding was more substantial than that Republican Gov. Kristi Noem proposed in her January budget address. She proposed a 5 percent increase in ongoing appropriations to nursing home providers plus $5 million in one-time funds to partner providers to identify potential alternative care options. The Legislature’s budget also appropriated the $5 million in one-time funds.

Other than nursing homes, Medicaid providers who saw the largest percentage increases in funding were psychiatric residential treatment facilities and community support providers. They saw 8 and 6.5 percent increases in funding, respectively.

Legislators also increased education funding by 2.5 percent to account for inflation, as well as state employee compensation, as Noem previously proposed. They also funded prevention programs proposed by Noem in January to address the state's methamphetamine problem.

In addition to the overall budget, legislators also passed Senate Bill 172, which set aside $500,000 for emergency relief in the case of natural disaster. Karr said the fund anticipates for a “rainy day,” like potential flooding anticipated in the state this spring.

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