Governor proposing cautious state budget
Posted: Tuesday, December 02, 2008
PIERRE, S.D. (AP) -- Gov. Mike Rounds said Monday he will propose a state budget that focuses only on basic needs in the face of an uncertain economy.
"It's a very cautious budget," Rounds told reporters.
The details of the governor's budget proposal were to be revealed Tuesday in Rounds' speech to the South Dakota Legislature, but he said his spending proposal for the budget year beginning July 1, 2009, will focus on educating children, protecting the public and taking care of poor people.
To balance the budget, Rounds is proposing to use $32.4 million in reserves, which he said would leave only $4.5 million in the state's most accessible reserve account by the end of the budget year in June 2010. That budget account for many years held more than $100 million, but it has been tapped in recent years to finance priorities in the state budget.
The governor's proposed budget for next year would spend nearly $1.24 billion in state general funds, which make up about a third of total state spending. The other two-thirds comes from federal funds and other state funds that are dedicated to specific uses, such as highway maintenance and construction.
Rounds noted that 50 percent of state spending goes to education, which includes school districts, universities, technical schools and the state Education Department. Another 34 percent is dedicated to helping poor people, particularly through the state-federal Medicaid program that pays medical expenses for low-income people. Eleven percent goes to public protection in law enforcement and courts and the remaining 5 percent funds the rest of state government.
The governor said recently that South Dakota law requires state aid to school districts to increase by the rate of inflation or 3 percent a year, whichever is less. He said poor investment returns will leave a $20 million shortfall because some trust funds, including one that provides money for education, will not be able to contribute money to the budget.
Rounds has imposed a freeze on state government hiring, out-of-state travel and large purchases except in critical situations.
The National Governor's Association and the National Conference of State Legislatures have asked the federal government to help states deal with budget problems by picking up a greater share of Medicaid costs, increasing support for unemployment benefits and food stamps, and providing money for highways and other infrastructure.
Rounds said he generally supports those proposals, but his budget proposal does not assume the state will get any extra federal aid. "I'm not counting on receiving anything at this time," he said.
"It's a very cautious budget," Rounds told reporters.
The details of the governor's budget proposal were to be revealed Tuesday in Rounds' speech to the South Dakota Legislature, but he said his spending proposal for the budget year beginning July 1, 2009, will focus on educating children, protecting the public and taking care of poor people.
To balance the budget, Rounds is proposing to use $32.4 million in reserves, which he said would leave only $4.5 million in the state's most accessible reserve account by the end of the budget year in June 2010. That budget account for many years held more than $100 million, but it has been tapped in recent years to finance priorities in the state budget.
The governor's proposed budget for next year would spend nearly $1.24 billion in state general funds, which make up about a third of total state spending. The other two-thirds comes from federal funds and other state funds that are dedicated to specific uses, such as highway maintenance and construction.
Rounds noted that 50 percent of state spending goes to education, which includes school districts, universities, technical schools and the state Education Department. Another 34 percent is dedicated to helping poor people, particularly through the state-federal Medicaid program that pays medical expenses for low-income people. Eleven percent goes to public protection in law enforcement and courts and the remaining 5 percent funds the rest of state government.
The governor said recently that South Dakota law requires state aid to school districts to increase by the rate of inflation or 3 percent a year, whichever is less. He said poor investment returns will leave a $20 million shortfall because some trust funds, including one that provides money for education, will not be able to contribute money to the budget.
Rounds has imposed a freeze on state government hiring, out-of-state travel and large purchases except in critical situations.
The National Governor's Association and the National Conference of State Legislatures have asked the federal government to help states deal with budget problems by picking up a greater share of Medicaid costs, increasing support for unemployment benefits and food stamps, and providing money for highways and other infrastructure.
Rounds said he generally supports those proposals, but his budget proposal does not assume the state will get any extra federal aid. "I'm not counting on receiving anything at this time," he said.
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