Another AAA and Budget Surplus
A column by Gov. Dennis Daugaard:
Throughout my time serving as governor, good stewardship of taxpayer dollars has been my goal. Two pieces of recent news can encourage South Dakotans that their state government is handling their money responsibly.
On July 11, Moody’s announced that it was giving South Dakota a AAA public issuer rating. In their announcement, Moody’s attributed the rating to South Dakota’s “high levels of reserves, low fixed costs, stable revenues and an economy that has historically been more stable than the rest of the nation.” The rating is South Dakota’s third AAA rating. Fitch awarded their highest rating to South Dakota last month, following Standard & Poors’ similar ranking of our state last year.
The good news from Moody’s was followed by the announcement of South Dakota’s fifth consecutive budget surplus. We closed the books on our budget year that ended June 30, 2016, and announced a $14.1 million surplus which will be transferred to our budget reserve fund.
Attaining a surplus this year certainly wasn’t inevitable. Just a few months ago revenue was trending below projections adopted in March. With the slowing of the agriculture sector, the state’s revenues were weaker in April and May. April revenue was lower than was received in April of 2015. May 2016 was better than May 2015, but still weaker than projected. Fortunately, June’s revenue came in higher than projected, leaving the state with $3.6 million more revenue than projected for the full fiscal year.
In large part our surplus is result of the fiscal restraint demonstrated by state agencies. Every agency reverted funds this year. Instead of spending every dollar appropriated to them, state agencies left nearly $10.5 million unspent, which also contributed to our surplus.
When I took office in 2011, balancing the budget was my number one priority. It’s not a flashy endeavor. Nor is it an easy task. I would not choose to relive the 2011 session when we had to make cuts, and saying no to funding requests isn’t pleasant. Still, managing the budget is among the most important tasks of any elected official.
As Calvin Coolidge once said, “There is no dignity quite so impressive, and no one independence quite so important, as living within your means.” Judging by Coolidge’s actions as president, I’d say he meant this applies to government as well as individuals. South Dakotans do their best to live within their means, and their government should do likewise.
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. These practices reflect the responsible values of South Dakota citizens.