- Associated Press - Wednesday, March 25, 2015

PIERRE, S.D. (AP) - South Dakota’s six public universities are grappling with about $1 million in increased costs by reining in hiring and cutting back hours and services as a result of the $8.50 minimum wage voters approved in November.

The universities will report the effects of the minimum wage increase at the South Dakota Board of Regents meeting next week, and the Regents have previously predicted that it would increase costs by about $970,000 over a full year. Universities are living with current budgets, according to the report, and students are working fewer hours and unfilled positions are being tapped to fund the hike.

Northern State University President James Smith said his institution attempted to use funds from unfilled positions to meet the needs created by wage increase. The university has about $100,000 in increased costs over the course of a year because of the hike, according to a December analysis for the Regents.

“It is a headache … but I wouldn’t say that the headache is greater than students having additional dollars,” Smith said. “It does help students.”

Residents voted 55 percent to 45 percent in November for a measure that raises the minimum hourly wage from $7.25 to $8.50 an hour, increases the $2.13 hourly tip wage to half the minimum wage, and ties future increases to the cost of living.

Smith said the higher minimum wage that the system implemented at the end of December had to be absorbed into university budgets that were already set for the current fiscal year. Smith said it is going to be factored into the university’s budget for the upcoming fiscal year.

“Once we project the budget for next year and include the increase, it won’t be as big of an issue,” said South Dakota Student Federation Executive Director Jess Peterson, who attends the University of South Dakota.

Board of Regents Executive Director and CEO Jack Warner said the universities are employing common strategies as a result of the wage increase. Some campuses have also seen reduced services.

South Dakota State University in is projected to have about $481,000 in increased costs, the highest of any of the universities. Allyson Helms, a student senator at the school, said the university has a significant number of student workers, which has caused a lot of adjustments.

A university spokesman said the school closes its student union two hours earlier on certain days in part because of the wage hike. Smith said the main dining area at Northern State, which is operated by a private company, closes in the afternoon on weekdays as a result of the increase and lack of student use.

A spokeswoman for Aramark, the firm that runs the food service, didn’t response to a request for comment.

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