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Bob Mercer

MERCER: State surplus really was much larger than shown

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PIERRE -- State government's surplus was many millions of dollars more than the $24.2 million that was shifted into the reserve fund recently.

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The Legislature with the governor's approval stashed extra money into budgets throughout state government so it wouldn't qualify as surplus.

Many of those actions took effect by law June 26, four days before the June 30 end of the 2013 budget year.

In many instances the money was placed into 2013 budgets as supplementary increases. Those moves were coupled with protection clauses.

The result was departments and agencies could carry forward unspent amounts to use in the 2014 budget year that began July 1, rather than have money revert to the reserve fund after June 30.

This is why some legislators argued, accurately, that reserves are much higher than what as reported by Gov. Dennis Daugaard's administration in the past week.

For example, in addition to the 2013-2014 carryovers throughout the government, the Department of Social Services was allowed to continue holding a special $20 million reserve of its own.

Stashing cash like that now is a widespread policy.

During a spring meeting of the Legislature's Executive Board, one of its members -- Sen. Deb Peters, R-Hartford, who chairs the Senate Appropriations Committee -- went so far as to say there wouldn't be any reversions from the 2013 budget.

She came very close to being exactly right.

This month, state departments and agencies turned back about $10.6 million from what they had been appropriated for fiscal 2013.

More than $9.7 million of those savings came just from Social Services, largely because demands for assistance programs were lower than budgeted. Another $573,000 came from the Department of Human Services.

No other department or agency or branch turned back more than $74,000. Many reverted nothing or only a few dollars.

Legislators meanwhile found sizable amounts to appropriate for other purposes, such as:

--About $5.8 million of general funds for bonuses to Medicaid services providers;

--$4 million to the troubled retirement system of the old state cement plant;

--$500,000 for economic development in the university system;

--$1 million into the railroad development fund;

--$4 million to the Future Fund for economic development; and

--$2 million to the authority that oversees the Homestake underground lab complex.

In one piece of legislation almost $1 million carried forward without any identified purpose other than to be used in 2014.

Millions were allocated to cover rising costs of self-insurance in state government, including $2 million for the universities that otherwise would have most likely come from higher tuition and fees.

There was $1.5 million added to a state trust fund with the intent to pay for scholarships in areas where teachers are critically needed. Another $1.5 million went into the trust to fund need-based scholarships for college students.

Meanwhile the official state budget reserve fund now has a balance of $95.3 million, a record amount, after the $24.2 million of remaining surplus was transferred there. In reality, the surplus easily could be $20 million to $40 million larger.

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