Gov. Dennis Daugaard has proposed a balanced Fiscal Year 2013 budget that provides more money for education, medical services for the poor and state employees.
Due to the national recession and declining state revenues last year, it was necessary to make significant cuts in funds for schools and Medicaid providers in order to balance the budget without raising taxes or raiding reserve funds. That re-setting of the state budget, along with improved revenues this year, will allow modestly increased spending next year.
"By being frugal, we have successfully achieved a new normal and can more optimistically plan for the future," Gov. Daugaard said. "Belt-tightening is never easy, and I again thank the Legislature for adopting a Fiscal Year 2012 budget that set the stage for a brighter future as the economy improves."
Gov. Daugaard outlined his new budget proposal today in an address to the South Dakota Legislature. The measure balances the next budget for essential state services without increasing taxes.
"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," the Governor said. "If we don't, we risk a return to an era of ongoing expenses exceeding ongoing revenues."
Among highlights of the Governor's proposed Fiscal Year 2013 budget, which begins July 1, 2012, and ends June 30, 2013:
* K-12 education would receive a 2.3 percent ongoing increase, coupled with an extra $12 million one-time investment
* Medicaid providers would receive a 1.8 percent ongoing increase, coupled with an extra $9 million in one-time funds
* All permanent state employees would receive a 5 percent one-time payment this fiscal year and an ongoing 3 percent increase in the next fiscal year
* $20.2 million in reserve funds would be used to pay for the historic Missouri River flooding this past spring and summer, and the looming threat of devastation by pine beetles in the Black Hills
Gov. Daugaard's FY2013 budget proposal, totaling $4.047 billion, would use general tax revenues of $1.243 billion, $1.770 billion in federal funds, and $1.033 billion of other state revenue sources.
"My proposed budget heeds the principles I put 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," the Governor said.