OPINION: Low taxes and low spending
In the 2016 session legislators serving on the appropriations committee adopted a new budget process. With the goal of more thoroughly evaluating the state's budget while improving timeliness, appropriators held budget hearings earlier and adhere...
In the 2016 session legislators serving on the appropriations committee adopted a new budget process. With the goal of more thoroughly evaluating the state's budget while improving timeliness, appropriators held budget hearings earlier and adhered to new deadlines.
Their new process worked. Under appropriators' leadership, South Dakota has once again adopted a balanced budget that continues a tradition of low spending.
As a state government, we manage to get by with relatively little. For Fiscal Year 2016, South Dakota has the second lowest general fund spending in the nation at $1.4 billion. Wyoming, the least populous state, is spending $300 million more this fiscal year than we are. The six other states with the smallest populations are spending more as well. Rhode Island is spending $3.6 billion, Montana, $2.4 billion; Delaware, $3.9 billion; Vermont, $1.5 billion; North Dakota, $3 billion; and Alaska, $5.1 billion.
Even with the half-cent increase passed this legislative session, our 4.5 percent state sales tax is still quite low. Among the other states that have a sales tax but no income tax, South Dakota fares well. Florida has a 6 percent sales tax; Nevada, a 6.85 percent tax; Texas, 6.25 percent; and Washington, 6.5 percent. Only Wyoming's 4 percent sales tax is lower than South Dakota's - which probably has something to do with Wyoming's oil revenues.
We're not only a low-tax, low-spend state, we're also a state that consistently balances its budget. It doesn't cost money to exercise financial responsibility.
In a time when many other states are adopting rosy projections and employing budget gimmicks to justify overspending, South Dakota is acting responsibly. We don't spend money we don't have, we keep our budget structurally balanced and we seize opportunities to spend in the short-term where it can lead to savings. Perhaps that's why last May, Standard & Poor's credit rating agency upgraded South Dakota's rating to AAA, the highest rating possible. Moody's followed suit, just last February, giving us their highest rating.
This is what South Dakotans expect of their government. They want good stewardship of their hard-earned dollars, minimal taxes and limited spending. Under these principles the state of South Dakota is keeping government small and allowing individuals to prosper.