Budget Practices: SD vs. DC
A column by Gov. Dennis Daugaard:
I have long been troubled by the federal government’s budget situation. According to the online U.S. debt clock, which uses figures from the U.S. Treasury, our national debt is currently at $19 trillion, or $61,346 per citizen. This crippling amount of debt is unsustainable, and it is disconcerting that future generations will pay the price.
Though there is no end in sight for the federal deficit crisis, South Dakotans can rest assured that our state budget is in stable and sustainable condition. Unlike some states, South Dakota has low tax-supported debt and our pension liability is fully funded.
A few days ago, we closed the books on Fiscal Year 2017 with a $7.9 million surplus. This marks the sixth year in a row that we have ended the budget year with a surplus. With revenues coming in below projections, it was a challenge. Since the end of the legislative session, state revenue has been lower than anticipated, leaving us with a $7.6 million shortfall.
In response, I directed cabinet secretaries to reduce their spending this spring, and every state agency reverted funds to fill the gap. Collectively, the three branches of government spent $15.6 million less than appropriated – with $14.4 million of savings coming from Executive Branch agencies and $1.2 million from the Unified Judicial System, Legislature, Board of Regents and constitutional offices. Because of those savings, we ended the year in the black. As required by state law, the surplus dollars have been deposited into the budget reserve fund.
In a time when the federal government and many other states are borrowing, adopting rosy projections, or employing budget gimmicks to perpetuate overspending, South Dakota is acting responsibly. There will always be cries to spend more, but the state cannot spend money it doesn’t have.
That’s why every year we work hard to keep our budget structurally balanced, with recurring spending supported only by recurring revenues. It’s one reason that last month our AAA credit rating was reaffirmed with a “stable outlook.” One-time, non-recurring revenues are used for capital projects, or to invest in a way that will reduce ongoing expenses. It’s like adding insulation to your attic to reduce utility bills.
Regardless of what is going on at the federal level, the State of South Dakota will continue to employ practices that reflect the responsible values of its citizens.