South Dakota's state budget is on pace to record a surplus.
Under a new culture of fiscal restraint, our state agencies are not spending every dollar they were allocated. This can allow those unspent dollars to be redirected to education, taking care of people, or into savings. As recently reported, we just finished our fiscal year on June 30, with $13 million of appropriated dollars unspent.
Meanwhile, our tax revenues have improved due to a sound economy. South Dakota businesses are expanding because our state has a balanced budget, low taxes, and reasonable regulations. Our state has one of the five fastest-growing economies in the country, and the U.S. Chamber of Commerce has called South Dakota a "boom state" for the next decade.
The best way to create a stable revenue stream for state government is through a strong, vibrant economy. We want revenues growing because of increased economic activity -- not because of increased tax rates. South Dakota's strong economy has led to just that. Although we still await final numbers for June, our tax revenue for the current fiscal year (FY2012) is set to substantially exceed that of 2011. Through 11 months, our General Fund revenue collections are up 7.3 percent from the previous year.
When our legislators met earlier this year, they anticipated much of that growth -- but our economy is out-performing even their revised estimate. Ongoing state revenues through the end of May are 1.5 percent (or about $16 million) ahead of that revised estimate. Those extra funds won't be spent, but rather can be used to improve our economy and make investments in future years.
Within the next few weeks, we will finalize the year-end figures and will report the status of our revenues, expenditures, and rainy day fund balances for the full fiscal year. All things are pointing in a positive direction.
I am proud of the South Dakotans who are working hard, creating jobs, and bringing economic growth to our state. I am proud of the state Legislature, which passed a balanced budget and adopted conservative forecasts for revenue and economic growth. And I am proud of those who work for state government, who have shown fiscal restraint by spending less than they were budgeted, even after they absorbed budget cuts.
Because of these efforts, South Dakota has a budget surplus instead of a budget deficit. This is how government should be run. Many other states, as well as the federal government, still have not put their fiscal houses in order, and that failure creates uncertainty that discourages business and hurts their economies.
South Dakota will not follow that track. We will continue to make the tough choices -- the right choices -- to keep our state budget healthy and our economy positioned for further growth.