We are down to the last three weeks of the legislative session. While there are still several major policy issues that need to be resolved, much of the attention is going to start focusing on the state’s budget.
In South Dakota, it is the Governor who proposes the budget. He did this during the first week of December. The legislature then evaluates that proposal and will ultimately make certain adjustments.
When the Governor proposed his budget, there was less than one million dollars in on-going funding that he did not identify for expenditure. Over the last couple of months, those projections largely look to be on target. In other words, if the legislature were going to make increases to education or Medicaid beyond those that the Governor proposed, those increases would have to be the result of cutting some other program.
There was also another part of the Governor’s proposed budget that indicated that there was approximately $26 million in “one-time” revenues that were not identified for expenditure. “One-time” revenues are those that we do not expect to get on a recurring basis – a lot like an inheritance check from a deceased relative or a bonus check from work. This is the area of the budget that I expect the legislature will focus much of their attention on during the remaining weeks.
One of the challenges is identifying appropriate uses for those funds that are truly one-time in nature. In other words, one would not want to hire an additional employee because those funds would not be available the next year.
Right now, I believe the legislature will largely be looking at four broad categories for those one-time funds. One of the areas of discussion is the budget reserves. In other words, based on the uncertainty with the federal sequestration, it might be wise to hang on to some of those dollars. If the federal government does not act quickly and the sequestration cuts take place, it is estimated that the state will loose between $25 to $50 million in federal funds. The dollars within our own budget could be used to replace the loss of federal funds for those programs that are deemed critical.
There are several other broad categories that are being looked at closely by the appropriators. Those include education, Medicaid providers and economic development. The trick with those categories is properly identifying the funds as one-time.
Practically speaking, I would expect that the end result will be some combination of those four categories.
As one of your voices in Pierre, I hope that you will contact me as these issues are debated throughout the session. You can reach me via email at: , by phone at: (605) 769-0540, or by mail at: 316 S Potter ST, Gettysburg SD 57442.