Opinion: First time state revenues have decreased since 1930sAs we saw legislative session open, it was well known that to avoid a structural deficit we would have to reduce the governor’s budget by $32 million to $45 million. The governor had proposed using “rainy day” funds of about $30 million to balance the budget. That would have left the State with less than $70 million in the “rainy day” reserve accounts.
By: Lance Carson, S.D. House of Representatives
As we saw legislative session open, it was well known that to avoid a structural deficit we would have to reduce the governor’s budget by $32 million to $45 million. The governor had proposed using “rainy day” funds of about $30 million to balance the budget. That would have left the State with less than $70 million in the “rainy day” reserve accounts.
This is the first time the state of South Dakota’s revenues have decreased since the 1930s. The state’s Medicaid obligation to the federal government has increased by $50 million. This sum put the state’s expenses over the revenues.
As we started the session, a huge amount of work was being done by all of the legislators to identify possible reductions or programs that could be eliminated. There was a great deal of dialogue pertaining to across-the-board cuts. The reason that I opposed this option is that there are departments that are very efficient and did not have 2 to 3 percent to give up without hurting the mission of the departments.
Over the two-month period of time, several lists developed of specific cuts and general run of the mill cuts. In the last 10 days, leadership got together and tried to adapt these lists into workable amendments. The list contained $40 million to $50 million in reduced spending.
As we headed into the last 3 days of this week, word came down that South Dakota would be in line for $28 million to $40 million in federal one-time monies with a string attached. That string being we had to show need of this money and not being able to balance the state’s budget without it. The way it was determined by the Budget Office, if we went ahead with the cuts and amendments and passed a balanced budget as required by the South Dakota Constitution, we would not be eligible to accept this money. If we didn’t take the money, it would go back into the pool and would be divided among the states showing need.
Leadership made the decision with counseling from the governor’s office to wait until the 29th of March to act on the general bill. Veto day will be March 30. If the Federal funds are received, the roughly $30 million in reductions and eliminations will not have to take place.
The work that was done to identify the reductions and eliminations was not done in vain. We have a list that we can go forward with when the new legislators are elected this fall and take the oath of office in January.
When the Legislature voted to go with a 38-day session instead of 40, I’m sure they didn’t realize that one of those extra days would be utilized in this fashion.
My next column will be about the final two days and the results of the session.
I would like to take this opportunity to thank the South Dakota Mail of Plankinton, the Aurora County Standard of White Lake, the Stickney Argus and The Daily Republic for this means of communicating with the constituents of District 20.
Lance Carson, a Republican from Mitchell, is a member of the state House of Representatives.