Daugaard Budget Mandates
By Gary Ellenbolt
Governor Dennis Daugaard told state lawmakers today he wants South Dakota's structural deficit gone in Fiscal Year 2012. Daugaard says every state agency has been asked to take at least a 10 percent reduction in its budget-and that state workers will not receive pay increases for a third straight year. Two other numbers offered by Daugaard are set to affect the budget-one is an increase in Medicaid funds that the federal government had taken care of the past several years.
"The second number increases our burden because of our strong personal income growth as compared to other states," Daugaard says. "In other words, South Dakota is stronger than other states, so the federal government says you must pay a bigger share. That assessment of the relative strength of other states, is done every year-this re-assessment, that comparison to other states, was not done during the past several years of the recession. That's-that's over."
Daugaard says while revenues and expenditures are forecast to improve somewhat, the structural deficit is projected at $127 million. He says the state stands to be better off in the long run if that deficit can be eliminated within one budget year.
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