Federal coronavirus aid, increased tax revenues impact state budget surplus
PIERRE, SD – South Dakota wrapped up the fiscal year with a surplus of almost $86 million. State revenues were up $62 million, and about $24 million that was budgeted was not spent.
Senator Jean Hunhoff of Yankton, Co-Chair of the Joint Committee on Appropriations, says the results are a reflection of the past year.
“First, we had coronavirus dollars that were replacing general fund dollars. Secondly you had a state that did not close. That’s the two avenues we’re seeing in the return on revenues,” said Hunhoff.
Hunhoff says taxable sales were much better than expected.
“When you’re looking from year-to-date, what has really increased is sales and use tax that was up from last year by 11.3 %. Our target was 3%. If you were looking at the legislative target and what we achieved, if you look at actuals, we’re at almost a 14% increase year-to-date.”
Hunhoff says legislators are setting budget estimates for the next fiscal year with the best information they have at the time.
“We try to find the right balance,” says Hunhoff, who noted that when there ends up being a surplus, the funds can be used for remaining fiscal year projects or in the upcoming budget. “But if you are far off from the target and expend those dollars, then you’re in a whole lot of trouble because you’re trying to make it up. The only way you make it up in South Dakota is to cut programs. That certainly impacts people.”
The $86 million has been put into a special reserve fund as the overall general budget reserve is at its legal maximum.