PIERRE (AP) - Gov. Dennis Daugaard's $4.3 billion budget plan, presented Tuesday, was held in check by modest growth in South Dakota's economy.
About $50 million would be added to general fund spending this year, with roughly 2 percent increases going to schools, health programs and Medicaid provider payments. But lower-than-expected revenues kept Daugaard from seeking larger spending hikes, and the budget contains no tax increases.
What isn't addressed in his budget request could be the subject of legislative wrangling: whether to increase taxes to fund roads and bridges that need replacing or repaving.
Republican legislators have put forward a loose proposal to hike taxes to fund transportation, as counties have said they need more than $80 million more for infrastructure repairs and state highways would need more than $140 million in additional money. Daugaard said he expects to make a decision on the transportation issue by the end of the year.
"People worry about reduced growth," Daugaard told The Associated Press ahead of the speech. "Well, at least we have growth. I'm happy to have growth. "
ADVERTISEMENT
He also proposed a 2 percent raise for state employees and a 2 percent hike in spending on South Dakota's four technical institutes - a slight drop from the 3 percent increases the governor proposed last year, when there was slightly more on the table to spend. Lawmakers ended up adopting even larger increases in some areas - such as schools and health program - during the 2014 session.
Last year's budget saw a one-time multimillion dollar windfall from unclaimed property, which comes from bank accounts and other financial holdings turned over to the state when owners cannot be found. But unclaimed property receipts through October - about four months into the budget year - were roughly $3.8 million short of expectations.
In addition, sales and use taxes through October took in about $2.7 million less than anticipated. The sales tax is the state's largest general fund source of money, and has been affected by low inflation.
Lawmakers will review Daugaard's proposal in a Tuesday committee hearing after the budget address and will begin debating the plan when the GOP-dominated Legislature convenes in mid-January.
Under the plan, education would see about $15.4 million in new spending, while health programs and providers would see a $16.2 million hike and state employee compensation would see $11.1 million in new funding.
A new juvenile justice overhaul announced on Monday would get about $3.2 million in ongoing funding. Daugaard also is proposing about $28 million in one-time spending for fiscal year 2015 for projects such as emergency and disaster funding and insurance initiatives.
"I've tried to demonstrate an attitude of living within one's means, always projecting revenues conservatively." Daugaard said. "We can always spend the money once it gets here."
ADVERTISEMENT
