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Protecting Your Tax Dollars


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This week, the state budget office announced that South Dakota closed the 2011-2012 fiscal year in the black. The state's ongoing revenues exceeded ongoing expenses by $47.8 million.

This is good news for South Dakota, and it happened because we applied common sense to our budgeting.

Imagine you are the owner and publisher of this newspaper, and you are planning your budget for the coming year. You would have to make your plan based on projections about your newspaper business. Certainly, you would consider recent trends in your business, your experience with newspapers, and the economic health of your town.

If you were running that newspaper, would you assume a big increase in advertising sales? Would you plan for lots of new subscribers? Would you calculate that your printing and delivery costs will go down?

Of course not. You might hope for those things to happen, but it would be very foolish to take them for granted. If you plan to spend every last dollar under the best-case scenario, your business will be in trouble if things don't go as planned.

The South Dakota state budget works in the same way. When I came into office, our state faced a projected budget deficit of $127 million. We made tough choices to balance our budget without raising taxes.

We hoped that our businesses would quickly bounce back from the recession. We hoped that grain prices would remain high and favorable weather for farmers would continue. We hoped that the growth in Medicaid enrollees would slow down, and that home construction would speed up. We hoped that state departments would come in under-budget.

We hoped for these things -- but we didn't take any of them for granted. We didn't assume everything would go our way.

In the fiscal year that just ended, things turned out a little better than we planned. That is good news. It shows that we are being cautious. I would rather have a little extra than come up a little short. And in the 2012 session, we were able to spend extra money on priorities like K-12 education because things turned out better than we planned.

South Dakota's economy is one of the healthiest in the nation, and we have seen a strong rate of recovery in the past 18 months. I'm optimistic about our future.

But we still need to guard against future threats. The debt crisis in Europe could pull the world back into recession. Looming federal budget cuts could cost South Dakota as much as $50 million a year, starting next year. Drought conditions in much of South Dakota could lead to a difficult year for our farmers and ranchers.

I will continue to be prudent and cautious with your tax dollars so we do not run a deficit. We will not foolishly plan on the best-case scenario. That way, when there is a little extra, we can put it back into our schools and other priorities.

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