OUR VIEW: Daugaard’s steady budget leadership continues with fiscal year ’15 plan
Some elected officials seem especially fitted to their times. South Dakota Gov. Dennis Daugaard is one of those officials.
When he took office at the beginning of 2011, the national economic recession had ravaged the state’s tax revenues. Daugaard and legislators were facing a projected budget with $127 million more going out than coming in.
Undaunted, the governor, in just his first month in office, boldly proposed 10 percent budget cuts to bring spending back in line with reduced revenues. Negotiation with legislators resulted in lesser cuts for some state funding recipients, but the ultimate goal was achieved and the budget was balanced. Schools, medical providers, state employees and others took financial hits because of the cuts.
In the years since, Daugaard has stayed the course, calmly and prudently advising cautious revenue estimates, cautious spending and wise use of any resulting surpluses or other unexpected money.
Tuesday, he proposed a fiscal year 2015 budget of $4.3 billion. If approved by legislators, it would allow 3 percent increases in school aid, payments to health care providers in the Medicaid program and other key programs.
“We are in an enviable position because we made difficult decisions three years ago,” Daugaard told legislators during his budget address at the Capitol in Pierre.
There are some who disagree with his approach and say his initial cuts were too deep and pushed schools, medical providers and others into a deep financial hole that modest funding increases — such as those proposed this year — cannot fill.
We see some validity in that counterargument but also recognize a harsh reality: Though we all think our schoolchildren, for example, are worth larger investments of state money, our state government can only and should only work with the revenue it can conservatively count on over the long term. Lawmakers should not pretend that ongoing increases in spending can be sustained with one-time revenue sources or reserve funds.
When Daugaard proposed his deep cuts at the beginning of 2011, he compared eliminating the budget deficit to curing an illness. It’s far better to take the medicine and start healing, he said, than to continue spending and using reserve funds as a Band-Aid. (Though Daugaard would never be so impolite as to criticize his predecessor, then-Gov. Mike Rounds had only one month earlier proposed using reserves to avoid deeper cuts.)
Because of Daugaard’s leadership, the Band-Aid is gone, the medicine has worked and the healing has begun. The recession is behind us, and Daugaard and legislators are debating how and where to invest extra money, rather than being stuck in a spiral of perpetual scarcity.
There are still debates to be had. While we agree with Daugaard that reserves should not be regularly depended upon to balance the budget, we do recognize the need for a healthy debate about how much money should be held in reserve.
That side argument would not even be possible, though, were it not for the leadership Daugaard has shown in balancing the budget and protecting the reserves. South Dakotans have been lucky to have him at the helm during this period in history, and he’s set an example of fiscal responsibility that we hope will continue to be followed for generations to come.