PIERRE, S.D. — Raises for state employees, teachers and a hemp program found a home in South Dakota’s 2021 state budget after all.

Gov. Kristi Noem confirmed that she and several Republican state lawmakers agreed to allocate $19.186 million in general funds into 2% inflationary increases for teachers, providers and state employees.

The money for the raises came from the Department of Social Services and Human Services budget.

Noem said the budget cuts were due to decreases in the number of nursing home residents and declining Medicaid enrollment in the state.

Noem said that she didn’t anticipate a decrease in Medicaid enrollments for three consecutive years, noting that the downward trend isn’t typical.

Dozens of nursing homes have closed in the state in the past two years due to facilities being unable to cover the Medicaid reimbursement funding gap.

Noem said her request to forgo a 2% increase in the statewide maintenance and repair budget freed up the money to fund workforce raises.

Lawmakers gutted and passed a bill that would legalize hemp in South Dakota to merely state, "The State of South Dakota will implement a plan for hemp in South Dakota.”

House Bill 1008 was deleted entirely and made into a one-liner.

The Senate passed the bill on a 25-9 vote Monday, March 9.

The move provides a way for lawmakers to include Noem’s budget for the program, which totals $3.5 million.

Noem’s estimate includes one-time costs totaling $1.9 million and $1.6 in annual ongoing costs. Noem said that the bill would get her signature only if it met her funding requirements.

Noem and the legislators pushing the hemp bill differed in how much the bill would cost the state. Noem’s required cost estimates include hiring an additional 15 full-time state employees, such as law enforcement officers with the Department of Public Safety, and four canine units.

The state will also need to expand the evidence storage capacity in anticipation of seized property

“Remodeling of existing laboratory space will be necessary to accommodate two new chemists, new equipment, and sample preparation required for quantitative THC testing,” Noem’s estimated hemp cost document states.

“Current drug storage space is overcrowded and will not accommodate additional samples that result from the legalization of hemp. Remodel of existing space to meet Drug Enforcement Administration drug storage specifications will require considerable financial investment.”

Just over $1 million of the funds will come from the state’s general fund.

The bill will now go back to the House for consideration.