South Dakota's next budget will be $92 million more than Gov. Kristi Noem anticipated in budget address
PIERRE — South Dakota's booming economy has legislators anticipating nearly $100 million more in cash coming into state coffers than they thought when they arrived to start the annual law-making session last month.
Growth in sales tax, lottery and other revenues continues to exceed expectations, according to economists with both the Legislative Research Council and the Bureau of Finance and Management. And appropriators considered those queues this this week when they adjusted the estimated revenue projections they'll use to set the state of South Dakota's next budget.
"I think this is a conservative number that we came up with that possibly leaves some ongoing dollars on the table," Rep. Chris Karr, a co-chairman of the Legislature's Joint Committee on Appropriations (JCA), told the Argus Leader on Monday evening following hours of budget hearings at the Capitol.
Karr and his cohorts on a revenue-setting subcommittee of the JCA tentatively settled on $2.067 billion in expected revenues for fiscal year 2023, which begins July 1. And that's about $92 million more than what Gov. Kristi Noem rolled out in her 2023 proposed budget in December.
The updated revenue projections for FY23 are pending approval from the full JCA, scheduled to consider the budget projection modifications the subcommittee came up with Tuesday morning.
The subcommittee was not united in the revenue adjustments it agreed upon, however. A contingent of Senators on the subcommittee who preferred even more conservative estimates worry that the $9 billion in stimulus sent to South Dakota since the start of the pandemic is artificially propping up the state's economy.
And when the federal checks stop coming, so could the levels of unprecedented growth in tax and fee revenues experiences of late in South Dakota.
Karr's co-chair, Sen. Jean Hunhoff, R-Yankton, said overshooting revenue projections could mean tough cuts are necessary further down the line.
"There's a little bit of an expectancy here that I don't feel comfortable," she said. "It's much harder to ask people to make reductions than it is to maybe underestimate."
The revenue projections established by the subcommittee are ongoing general fund dollars and do not encompass any one-time federal stimulus dollars. The entire FY23 state budget, to be adopted in March, is anticipated to surpass more than $6 billion.