Noem: South Dakota’s budget surplus exceeds earlier estimates by $125 million
PIERRE, S.D. (Dakota News Now) - South Dakota will have a larger budget surplus than state officials expected.
Gov. Kristi Noem said in a special address Tuesday that state revenue surpassed earlier estimates, potentially resulting in an extra $125 million budget surplus on top of the $250 million surplus laid out in her December budget address.
A portion of the budget comes from higher-than-expected revenue, but a bulk of it comes from money freed from the budget by using federal coronavirus relief funding to pay for state expenditures.
In her address, Noem said the state will likely be able to use another $74 million from flexibility provided by an extension of federal Coronavirus Relief Funds. The governor used her her proposed $100 million broadband expansion as example of how this flexibility works. She said the state can use $25 million in CRF funds toward the project, meaning only $75 million would come from the state’s budget.
Noem said the state is forecasting about $51.5 million in one-time revenues for fiscal year 2021. In December, the governor proposed a $5.05 billion budget, which included roughly $250 million in one-time money. When adding the additional money announced Tuesday, lawmakers are looking at a one-time budget surplus of around $375 million.
The governor called the state’s growth rate “historic.”
“When you account for changes in taxes and fees, the state has likely never seen this kind of growth in its ongoing revenue. We looked back thirty years and believe this is unprecedented.”
While the budget looks rosy, Noem asked lawmakers to stick to “conservative ideals,” saying remaining fiscally responsible is how the state achieved this position.
“Remember, not long after the 2008 financial crisis and the resulting federal stimulus funding, our state faced 10% budget cuts to make ends meet,” Noem said. “With that recent historical context in mind, we must remain disciplined and save for the future, whatever it may look like.”
Noem added that she believes the fact that South Dakota did not institute any statewide shutdown in order to slow the spread of the coronavirus contributed to the state’s financial success.
The news was good, but some were skeptical if the 11-minute speech before a joint session of the legislature was entirely necessary.
The South Dakota Broadcasters Association reports one lawmaker said privately, “I’m not sure what changed overall, if anything.”
Gov. Kristi Noem is set deliver a special address to the legislature regarding the state budget on Tuesday afternoon.
It is unusual for a governor to deliver an address like this to the full legislature mid-session. Each year, the governor delivers an annual budget address in December and a State of the State address at the beginning of the legislative session in January. But this year, it seems, Noems decided another speech was warranted.
The governor has dropped a few hints on the details. She Tweeted Tuesday morning the state’s budget is in “good shape” and that “we must take this opportunity to save and invest for South Dakota’s future.”
Noem spokesperson Ian Fury tells Dakota News Now that revenue projections are “historically strong.”
The address is scheduled to take place at 2 p.m. CT. Dakota News Now will livestream the address. You will be able to find that livestream attached to this story.
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