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South Dakota state budget

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South Dakota's budget for FY2013 is $4 billion and became law afterGovernor Dennis Daugaard signed it on March 16, 2012. The budget spends $1.2 billion in general funds, $93 million more than the FY2012 budget.^[1]

South Dakota has a total state debt of approximately $6,585,256,000 when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the budget gap. ^[2]

See also: The South Dakota State Budget on State Budget Solutions

[edit] Fiscal Year 2013 State Budget

Governor Dennis Daugaard signed the $4 billion FY2013 budget into law on March 16, 2012.^[3] The budget spends

• $1.2 billion in state general funds,
• $1.75 billion in federal funds, and
• $1 billion in other state funds dedicated to specific purposes such as highway construction and maintenance.^[3]

Spending increases in the budget include:^[3]

• 2.3 percent increase in state aid to school districts to account for inflation,
• 1.8 percent ongoing average increase in reimbursements to Medicaid providers, and
• 3 percent across-the-board salary increase for state employees

Budget Negotiations

The Joint Appropriations Committee determined that revenue for FY2013 would be approximately $10 million higher than the governor projected.^[4]

Governor Daugaard presented his FY2013 budget to the legislature on December 6, 2011.^[5] A summary of the governor's proposed budget can be found here. Under the budget, $463,456,625 (equivalent to 37.3%) would go to Health and Human Services and $404,622,459, or 32.5% percent, would go to local government and education. Corrections would receive $82,814,360, or 6.7 percent.^[6]

Agencies began submitting FY2013 budge requests in fall of 2011. The Department of Education is asking that the legislature stick to the school funding formula, something that hasn’t been done the last two years.^[7]

[edit] Fiscal Year 2012 State Budget

The South Dakota legislature approved a $3.9 billion budget for FY2012 and was signed by the governor on March 17, 2011.^[8] Governor Dennis Daugaard said South Dakota was the first state in the nation to pass a budget for FY2012.^[9]

The budget spends $1.1 billion in general funds and eliminates the state’s $127 million structural deficit.^[9] It also spends $1.75 billion in federal funds and $1 billion in other funds.^[10]

The budget makes cuts to government agencies, Medicaid, and education, but some of the cuts are not as drastic as originally feared. Another $12 million, available because the growth in Medicaid patients has been lower than expected, was awarded as a one-time boost to some medical facilities.^[9]

The budget does not raise taxes and does not tap into the state's reserves.^[8]

In the first quarter of FY2012, state sales tax collections were up 2.4 percent from the same period a year ago, which is what the Legislature expected when it passed the state budget.^[11]

[edit] Budget Cuts

For the third year in a row, South Dakota’s state employees will not be receiving any pay raises.^[12]

Funding for South Dakota Public Broadcasting was cut by $537,000 in addition to being cut $750,000, just over 16% in March 2011.^[13]

[edit] Education

The budget trims K-12 education funding by 6.6%, less than the 10% originally proposed by the governor in part because of the use of $12 million in one-time funds^[14] and also because another measure allows school district property taxes to remain at current levels instead of falling to match declining state aid.^[9]

In the budget, the university system receives slightly more than $150 million from state general funds.^[15]

[edit] Medicaid

The cuts to Medicaid and health care are also 6.6% overall, but the size of cuts to different kinds of facilities will depend on how much they depend on Medicaid as a revenue source. Another $12 million, available because the growth in Medicaid patients has been lower than expected, was awarded as a one-time boost to some medical facilities.^[9]

[edit] Governor's proposed recommendation

The governor's recommended budget for FY2012 in the complete budget book can be found here.

Governor Daugaard's proposed budget for FY2012 , including special appropriations, totals $3,921,743,642, which is an overall decrease of $172,953,151 in total funds from FY2011. For FY2012, the Governor is proposing a general fund budget of $1,136,463,152, down $12,365,660 million from FY2011.^[16]

The governor's proposed FY2012 general fund budget is distributed as follows.^[16]:

• $349.9 million, or 30.8% for Aid to Schools;
• $425.8 million, or 37.5% for Health, Human, and Social Services;
• $150.7 million, or 13.3% for Higher Education;
• $78.4 million, or 6.9% for Corrections;
• $59.2 million, or 5.2% for the Legislature, Unified Judicial System, Public Utilities Commission, and Elected Officials;
• $15.4 million, or 1.3% for Agriculture; Environment and Natural Resources; and Game, Fish, and Parks; and,
• $57.1 million, or 5.0% for the Remainder of State Government.

[edit] Fiscal Year 2011 State Budget

The state has a balanced budget for FY2011.^[17] Gov. Dennis Daugaard announced that the state ended the 2011 fiscal year on June 30 with a balanced budget and without using any state reserve funds.^[18]

After initially being hesitant, then-Gov. Mike Rounds announced that the state would accept all the $47.2 million in federal aid it was allocated in the jobs bill, H.R. 1586, passed by Congress in August 2010.^[17] Although the state was one of the first to receive its education funds from the federal government, Gov. Rounds opted to save the $26.3 million for K-12 education for FY2012, at which time it will boost the state's budget by replacing state-aid funds that were to go to schools this year.^[19] Under the governor's plan, the extra money from the federal government for education to increase spending per pupil in FY2011, but instead will use the federal money to free up state funds that can be carried over to support school districts in FY2012.^[17] The federal stimulus funds will act as more state fiscal stabilization funds.^[19] The governor spokesman said that he didn't want schools to get used to the one time funds that won't be available next.^[20]

The Legislature cut spending in the university system in FY2011, but the Legislature will be asked to add $10.6 million in funding for higher education that cannot be spent until FY2012, which will qualify the state for the federal education aid.^[17]

[edit] Fiscal Year 2010 State Budget

South Dakota ended FY 2009 on June 30, 2009 with a slight General Fund shortfall of $1.364 million, 0.1% below projections. Minor cash adjustments and unexpended carryovers bridged the gap and allowed closing the year with a balanced budget.^[21] The use of stimulus funds allowed the state to balance the budget.^[22][23]

Gov. Rounds recommended a FY 2010 total budget of $3.6 billion with a $1.2 billion General Fund budget, $58 million above FY 2009's actual General Fund figure.^[24]

The South Dakota Legislature approved a FY 2010 total budget of $3.945 billion, $342 million above the Governor's recommendation, with a General Fund budget of $1.134 billion, $67 million below the Governor's recommendation. $395 million of the difference from the Governor's recommended and approved Legislative total budget is federal funds.^[25]

Sales tax collections, which account for more than half the state's general fund revenue, totaled to $642.8 million for the year, a drop of 2.4% from the previous year, and general tax receipts declined $31 million from FY2009.^[23]

• See South Dakota state budget (2008-2009) for more information.

[edit] Budget Background

South Dakota's fiscal year begins July 1 and ends June 30 of the following year. State law requires annual preparation and approval of the state's budget and according to the State Constitution, the budget is required to be balanced before approval. The Governor presents the annual budget to the Legislature by the first Tuesday following the first Monday in December. Both the House and the Senate are then required to approve a budget by the end of the legislative session. The Governor has the power to veto individual line items in the budget approved by the legislature. ^[28]
Throughout the fiscal year the state budget must remain in balance and state agencies are not allowed to request additional funds. However, the commissioner of the Bureau of Finance and Management has the authority to authorize intradepartmental transfers of funds so long as the total spending levels are not exceeded. Transfers must first be accepted by the legislature's Interim Appropriations Committee. ^[28]

[edit] Budget figures

The following table provides a history of South Dakota's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

[edit] Accounting Principles

Main article: South Dakota government accounting principles

The South Dakota State Auditor is an elected position, and constitutionally independent office holder who performs pre-audits and performance audits of all state government agencies. Richard Sattgast has held the office since first elected in 2002.^[30]

The South Dakota Department of Legislative Audits (DLA) performs financial and compliance audits of state agencies and local governments including the following types of entities:^[31]

• State Agencies
• Universities
• Authorities
• Counties
• Municipalities
• School Districts
• Townships

The DLA publishes its audit reports online. Martin L. Guindon is Auditor General of the DLA.^[32]

The Institute for Truth in Accounting (IFTA) rates South Dakota “Worst” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider South Dakota's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[33]

South Dakota's rating from Standard and Poor's was upgraded from AA^[34] to AA+ in 2011.^[35]

[edit] Budget transparency

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[36]

• South Dakota will receive an estimated $369,155,575.^[37]

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[38][39]

More than $288 million in stimulus money went to phantom districts in South Dakota to "create or save" 862 jobs, according to the ARRP tracking website. About $280 million of those funds are locked in a district that has not been seen since the 1980 census. South Dakota has only one Congressional District, represented by an at-large Representative.^[40]

[edit] Budget transparency

• See sample transparency legislation at the Sunshine Standard

Open.sd.gov is the name of South Dakota's publicly available spending transparency database. It was announced on March 12th, 2008, approximately 6 months after transparency legislation from State Representative Hal Wick had been vetoed.^[41] South Dakota Senate Bill 143 (2009), which was signed into law on March 13, 2009^[42] required "a searchable internet website for the posting and access of certain public records and financial information."^[42]

[edit] Government tools

Open.sd.gov provides a database of state financial information, organized by broad topics such as budget, expenditures, revenues, vendor contracts, and payroll. Much of the information is updated twice per week. And, since data populating the database is tied directly to South Dakota's accounting system, payroll information is updated in real-time (that is, as soon as information enters the general accounting system software, it will appear on this database).

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Open SD	P	Y	Y	Y	Y	Y

See also: Evaluation of South Dakota state website

[edit] Economic Stimulus Transparency

• The state will receive approximately $49 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[43]

• South Dakota was receive an estimated $523,121,310 from the 2009 ARRA stimulus.^[44]

[edit] Limitations and Suggestions

[edit] Public employee salary information

See South Dakota state government salary

[edit] See Also

South Dakota taxpayer-funded lobbying

South Dakota public pensions

[edit] External links

[edit] References

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	v • d • e State of South Dakota Pierre (capital)
Transparency	Sunshine Law | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of Towns | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of township websites | Evaluation of school district websites |
Government	South Dakota State Constitution | Executive | House of Representatives | Senate |
Judiciary	South Dakota Supreme Court | Judicial nomination process | Judicial news | Judicial activist organizations |
Ballot Measures	Ballot measures | List of ballot measures by year | List of local ballot measures | Signature requirements | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements |