South Dakota Closes 2021 Budget Year with a $85.9 Million Surplus

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South Dakota Closes 2021 Budget Year with a $85.9 Million Surplus

State’s Total Reserves Increase to $301.8 Million

 

PIERRE, S.D. – Today, Governor Kristi Noem announced that South Dakota closed the 2021 budget year on June 30 with a surplus of $85.9 million. Total general fund revenue for fiscal year 2021 finished $62.0 million higher than adopted estimates, and the state general fund budget ended with expenditures approximately $23.9 million lower than budgeted.

 

“Because of our respect for freedom and our continued emphasis on fiscal responsibility, South Dakota’s financial house is in order and positioned to ensure a safer, stronger, and healthier South Dakota for the next generation” said Governor Noem. “Our economy continues to be the strongest in America. Our low unemployment rate, strong labor force recovery, and terrific tourism numbers are generating historic revenues for the state.”

 

 South Dakota’s year over year growth in fiscal year 2021 was $274.2 million or 15.7%, compared to a ten year average of 4.6%. This historic growth is the largest that the state has seen in over 30 years; quite possibly in state history. Sales and use tax, which is the state’s largest revenue source, finished $26.6 million above estimates and grew 14% over the prior fiscal year, compared to a ten year average of 5%. The full fiscal year 2021 revenue metrics can be found at bfm.sd.gov.

 

“We will continue to be responsible stewards of the taxpayers’ money with an eye towards future economic difficulty,” continued Governor Noem “With Washington driving high inflation and the Federal Reserve planning to raise interest rates, our rainy day fund is in strong shape to weather whatever challenges may arise.”

 

By law, the fiscal year 2021 surplus of $85.9 million was transferred to the state’s budget reserves. The state’s reserves now total $301.8 million, or 16.6% of the fiscal year 2022 general fund budget. The state has held a AAA credit rating with all three major credit agencies since 2016.

 

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8 thoughts on “South Dakota Closes 2021 Budget Year with a $85.9 Million Surplus”

  1. It would be interesting to see how/where all of the federal COVID funds play into these figures. On the flip side, wouldn’t it be nice if our state government would use that surplus to help reduce property taxes or better yet, reduce or eliminate taxes on food and clothing (like many other states). Yes, our economy in South Dakota is chugging along at a good pace. However, don’t count your chickens too fast what with the drought and crappy ag prices, we might be in for a tough 2022. Bottom line, these figures just who you that it’s time to give South Dakotans a tax break of some sort.

      1. Yeah, it kind of seems that way doesn’t it. Yet, I believe that we are only obligated to squirrel away 10% of our budget, if that (I could be wrong on that number). Many states only hold onto around 6%. I don’t recall when we have ever had to dip into these reserves, even during the Daugaard administration when they cut 5-10% from various departments, etc.

        1. LOL
          I go back and forth as a fiscal conservative. I like to see savings as it shows that we are responsible and keeps are bond rating very high (ability to borrow at a very low rate) thus saving us money if the need arises. Commercial levy rates are out of control right now which are passed on to all of us through business transaction’s which out of state businesses pay zero for. We have one of the best run governments which drives the democrats that are left in this state crazy and why they cant get voted in.

          The worst thing that could ever happen is we add a income tax to reduce the property taxes which is what happened in Iowa and Nebraska.

          The 10% sound right.

    2. Typo – the above should read “these figures just SHOW you” Wish I could blame Pat’s blog spell checker but I can’t!

  2. Maybe reconsider the cuts that were made to state employee benefits including health insurance and retirement. Or the suspended implementation of wage step increases in several departments. Or the wages of the rank and file at the state penitentiary.

  4. One of my favorite aspects of plains living is the frugality of genetic memory of the people whose ancestors were raised here.

    It’s been a crazy 6 years.

    And we haven’t hit bottom, yet (but soon).

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