Governor Daugaard's Budget Address-DIGEST
By Jenifer Jones
Governor Dennis Daugaard delivered his budget address Wednesday. His goal is to balance the state budget without raising taxes or using reserve funds.
Governor Dennis Daugaard says South Dakota's ongoing expenses continue to exceed ongoing revenues, leaving the state with a structural deficit. He says his entire budget proposal is based on the need to eliminate that deficit. In order to make that happen, he's looking to make $127 million worth of cuts.
"We don't want to have this discussion year after year," Daugaard says. "And those of you who've been in the legislature the last several years know that it's resulted in cuts and freezes and dissatisfaction all around."
Daugaard says everyone needs to share in reductions. He's proposing a ten percent cut throughout state government, and more in some executive branch agencies.
"Education funding at all levels includes the per student allocation in K-12 funding, in state aid to general education, the per student funding in post secondary institutes, and the Board of Regents," Daugaard says. "The ten percent cuts to Medicaid providers also includes cuts in the following agencies: Social Services, Corrections, Human Services, and the Unified Judicial System. The rest of the cuts were made to specific agencies, including every agency within state government. For example, Social Services cut provider rates by ten percent, and also cut the rest of their budget by ten percent, at least."
Daugaard says the education cut of ten percent to the per student allocation is coming from a reduction of state aid and a reduction of property taxes. But he says the schools receive funding from many other sources.
"A ten percent cut to the per student allocation is $480.64 per student," Daugaard says. "Considering all the revenues that school districts receive, the reduction on a statewide average is only 5.4 percent in total funding."
The Governor is also proposing another year of no raises for state employees, and a reduction in full time equivalents, or FTE's.
"My budget proposal reduces agencies under my control by 161 FTE," Daugaard says. "This is the third consecutive year of a recommended reduction in FTE's in agencies under control of the Governor. The large reduction in Tourism and State Development is attributable to employees transferring to the Deep Underground Science and Engineering Laboratory funded by the National Science Foundation or the US Department of Energy. A reduction of 39.7 FTE in the Department of Correction impacts each institution while still providing sufficient security and safety to both inmates and staff."
One of the main principles of Daugaard's plan is not using reserve funds. Daugaard says if the state uses this money to pay for ongoing expenses, the reserve funds will eventually run out.
"Using reserve sounds good, but it just kicks the can down the road another year, and FY'13 presents a year in which our options are gone," Daugaard says. "It's not enough to go just part way. If we do we'll be back here again next year talking about more cuts, and we'll have squandered most, if not all of our reserves. I'm tired of talking about cuts every year, and about freezes. I'm tired of looking at death by a thousand paper cuts. We need to hit the reset button and get our budget to a new norm. The new norm for state government must be a level of ongoing expenditures that equal our ongoing revenues. It's like having a bandage on your arm. Do you want to peel it off a little tiny bit at a time? No. Let's tear it off. Let's get the pain over with. Let's set ourselves up for a positive future, a brighter future, instead of this freeze and cut year after year. I'm tired of it."
Daugaard says his job is to put forth a proposal that starts a discussion. He says it's not the plan, it's a plan.
"But I am not willing to abandon the principles upon which the budget is built," Daugaard says. "Ongoing expenses must be covered by ongoing revenue. The budget must be structurally balanced without raising taxes. One time money should be used for one time expenses, and not perpetuate overspending. We owe it to the people of South Dakota to have a serious discussion about this budget."
The Governor acknowledges that many oppose the cuts he's proposed, but he says the state can't spend money it doesn't have.
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