On Tuesday, I presented my budget for the State of South Dakota in Fiscal Year 2013 (FY2013). This proposal will fund necessary state government services and special appropriations for the fiscal period beginning July 1, 2012, and ending June 30, 2013.
Last year, we adopted a state budget that required tough choices but placed our state on a strong financial footing. Together, we eliminated the structural deficit and ended the use of one-time funds to pay for ongoing operations, recognizing that ongoing expenses should not exceed ongoing revenue.
When I proposed last year's budget, I promised that tough choices one year would lead to a brighter future when we could talk about increases, not more cuts. This year, we have that opportunity to build from a new base and consider investments in key areas. At the same time, we must continue to be cautious, as many external factors -- the world economy, federal budget cuts, and continued questions surrounding federal healthcare reform -- could dramatically change our current projections.
My proposed budget heeds the principles I set forth last year: Ongoing revenue pays for ongoing expenses, one-time funds pay for one-time expenses, and reserve funds are used only for emergencies.
This budget will fund essential government services and proposes ongoing funding increases for education, Medicaid providers, and state employees. K-12 education will receive a 2.3 percent ongoing increase, coupled with one-time investments that total more than $12 million. I am also proposing that Medicaid providers and state employees receive extra one-time funds that are the result of strong revenue growth. As we move into the future, it is important that we use funding increases as an opportunity to build better institutions and systems, rather than simply increasing funding for the same approaches.
I have also proposed the use of reserve funds to pay for disaster response efforts -- the historic flooding we suffered this spring and summer, and the looming threat of devastation in the Black Hills because of mountain pine beetles.
Last year, we joined together to make tough decisions and balance our budget. This year, we can consider proposals about new growth and new ideas. Still, even as we have begun to recover, it is crucial that we remain true to maintaining a structurally-balanced budget based on conservative revenue estimates. If we don't, we risk a return to an era of structural deficits.
Our Constitution asks the governor to begin the conversation by proposing a budget. As I said last year, my proposal is A plan, not THE plan, and I look forward to working with the Legislature and public to create the best budget for South Dakota's future.