Gov. Daugaard addressed a joint session of the legislature to give us the facts regarding the state of the State and his budget proposal for 2012. The following are the main goals he has for the 2012 budget:
1) Eliminate the $127 million structural deficit that has been created over the past several years, this year, without raising taxes. And do it without using reserves. They are for emergencies and disasters only as we had seven statewide disasters this past year. It is the governor's opinion that the state is better off correcting the problem in one year rather than continuing to put it off for coming years.
2) He proposed that every department of state government would need to take a 10-22 percent cut in their budgets. Executive branch already set the example by cutting 10-15 percent in salaries this included the governor's own15 percent cut. The Legislature currently is considering taking a 10 percent cut also.
3) The state of South Dakota has incurred $86 million in mandatory federal increases specifically in Medicaid and Social Services. (This is part of the $127 million deficit.)
4) The governor indicated that he would be cutting Full-Time Equivalents (FTEs) by 161.
5) His proposal includes a 10 percent cut across the board for education, providers and state workers.
However, he left it open as to other possible avenues to balance the budget. He went on to compare South Dakota's situation to other states; for example, California has to make a 20 percent cut in its budget, Minnesota 16 percent and Illinois a 46 percent cut, as compared to South Dakota's cuts of nearly 11 percent.
Daugaard indicated that he would veto any alternatives that would result in tax increases. He said, "we can not always appease the tax spenders, but we will always put South Dakota taxpayers first."
His budget analysis show that if we spend the states reserves now they would not be replenished until 2031. And if we keep them in place by 2016 they will pay out $19.9 million. Another potential bump in the road in the near future comes in the form of federal funding.
The South Dakota Department of Transportation (DOT) is funded by federal, general funds and other funds. It is broken down into 65.5 percent of funds from the federal government, 34.4 percent comes from other funds and the remaining .1 percent comes from state general funds.
The DOT plans to comply with the governor's proposed cuts; however, the federal program to fund state highways expired on Sept. 30, 2009. It was extended to Dec. 31, 2010. Congress has now extended it through March 2011, but it has not come up with a replacement program as of yet. This could result in a reduction in federal funding in the future – just one more reason to remove the structural deficit our state budget now.
On a brighter note, Thursday evening at the annual Tourism Banquet in Pierre. Daugaard presented the A.H. Pankow Award to the minority leader of the House of Representatives, Bernie Hunhoff. The award recognizes a member of the broadcast media, print media or public relations industry who has shown superior interest in and coverage of the South Dakota visitor industry. Hunhoff accepted the award for South Dakota Magazine. A well-deserved award to a great South Dakotan.