With less than a month before the end of legislative session, state lawmakers are setting parameters for the budget.
Lawmakers have several millions of dollars to work with in the last few weeks. That’s despite sales tax collections going down.
The decline in sales tax collections — which is the primary source of revenue collection for the state — is driven by lawmakers temporarily cutting the sales tax last year.
Despite that, lawmakers on the budget committee anticipate additional one-time revenue of $41 million dollars. Lawmakers typically put that money toward special projects and facilities.
Going forward, they see an on-going increase of $21 million in revenue collections. They typically appropriate those dollars to state employee salaries, education and other ongoing expenses.
Sioux Falls Republican Rep. Tony Venhuizen described the budget projections as “cautiously conservative.”
“In South Dakota we try to be cautious in our budget making, and that means we adopt budget estimates that are realistic but conservative," Venhuizen said. "As we get further in the year, sometimes we have reasons for optimism and that’s true this year. So, our revenue estimates are up a little bit.”
There are debates about where those one-time dollars should go, from continued investments in the Board of Regents to construction costs on new state prisons.
However, much of this year’s budget conversation was informed by the end of federal COVID-cash infusions.
“That certainly is a factor, and that’s why we’re being pretty conservative in our estimate," Venhuizen said. "We are going to start seeing those COVID dollars work their way through the economy and that effect will fade – but we are pretty confident.”
In a statement, Bureau of Finance and Management commissioner Jim Terwilliger said “I do think the appropriations committee took a conservative approach on adopting revenue this year... We look forward to working with the legislature to maintain that conservative approach as we work on a final budget.”
Late last year, Gov. Kristi Noem cautioned lawmakers to budget conservatively.