Earlier this month, I presented my proposed budget to the state Legislature for the coming fiscal year.
Our constitution requires the governor to propose a balanced budget to the Legislature each December, prior to the legislative session in January. I'm proud that our budget is balanced every year. I am particularly proud that our budget is structurally balanced -- meaning that our ongoing expenses do not exceed our ongoing revenues.
South Dakota has a healthy and growing economy. Over the past few years, we have recovered quickly from the recession. In fact, South Dakota recovered all the jobs lost during the recession two years before the United States did. We have also enjoyed strong years in the agricultural economy.
This year, as the rest of the nation emerges from the recession and catches up with South Dakota, our economic growth has returned to a more stable and predictable level.
A steady economy means slow but steady growth in state revenues. While the law requires that schools receive an inflationary increase of 1.5 percent this year, I was able to propose a budget that does a little better, increasing school funding by 2 percent. The proposed budget also increases reimbursement rates for Medicaid providers by 2 percent, and increases state employee salaries by 2 percent.
Although there isn't money for big new programs or lots of new spending this year, I was pleased to propose a few increases in key areas.
I am proposing a 30 percent increase in the value of the South Dakota Opportunity Scholarship, from $5,000 to $6,500 over four years. This is the first increase since the scholarship was created over a decade ago, and it will help encourage more students to take a rigorous high school curriculum and to stay in South Dakota after high school.
Two years ago, I joined with the Chief Justice and legislative leaders to propose and pass a major reform of our adult criminal justice system. This reform is already paying dividends, as we maintain public safety, hold offenders more accountable and save money. This year, I am proposing to continue that success with new drug and DUI courts. I am also proposing funding to enact similar reforms in our juvenile justice system.
The budget also includes funds to continue the dual credit program I proposed last year. This program allows high school juniors and seniors to take university or technical institute courses, and earn both high school and college credit, for $40 per credit. The program succeeded beyond our highest hopes, with enrollment trending toward three times that which was projected. That is great news for our young people and I'm asking for funds to pay for that growth.
Many people have good ideas about how and where the state can spend additional dollars to make South Dakota stronger. At the same time, we have to remember that our state is in a strong financial position today because we don't spend money that we don't have. I look forward to a good debate about the proposed budget with the Legislature and the public over the next few months.