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South Dakota Ends Budget Year in the Black by $24.2 Million

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Getty / Bishop

South Dakota state government closed the 2013 budget year on June 30 with a  surplus.

The state general fund budget for Fiscal Year 2013 ended with higher revenues and lower expenditures than projected.

Revenue for the completed 2013 fiscal year exceeded estimates adopted by the  legislature, by $13.6 million. State agencies demonstrated fiscal restraint, spending $10.6 million less than appropriated. Much of the savings came in Medicaid. More on that below.

In  total, the state’s financial picture improved by $24.2 million from the March  fiscal year 2013 estimates.

Governor Dennis Daugaard said:

“For  the second year in a row, we maintained structural balance in our budget. This  was my number one priority when I took office.  I’m pleased that FY2013 was closed successfully, and that South Dakota’s ongoing expenses  are being fully covered by ongoing revenues – without the use of one-time  receipts or rainy day funds, and without raising taxes. The strength with which  we end FY2013 increases the likelihood that we can maintain a balanced budget  for FY2014 while continuing to invest in critical areas like education, Medicaid  and public safety.”

South  Dakota’s sales and use tax receipts, the state’s largest revenue source,  finished the fiscal year well, growing nearly 6 percent in the month of June,  indicating an economy that continues to expand.

Sales  and use tax collections in FY2013 totaled $766,095,539, which was 4.26 percent – or $31.7 million – above the previous year. Collections from the sales and use  tax accounted for 57 percent of general fund receipts in  FY2013.

Other  notable revenue increases came from the insurance company tax and property tax  reduction fund receipts, which grew 8.01 percent and 4.70 percent, respectively,  over FY2012. The revenue source that experienced the largest decline was the  bank franchise tax, declining 40.93 percent – or $12.2 million – compared to the  prior year.

Total  state general fund receipts were $1,363,765,170 for the recently ended fiscal  year. Ongoing receipts to the general fund totaled $1,258,177,217.

State  agencies remained within their appropriated budgets in  FY2013. Collectively, the three branches of state government spent  $10,639,304 less than appropriated. Most of the ongoing expense reduction,  $9,762,087, was seen in the Department of Social Services, as enrollment growth  in Medicaid and the Children’s Health Insurance Program declined unexpectedly to  near-zero percent in recent months.

South  Dakota state government ended FY2013 by transferring $24.2 million to the Budget  Reserve Fund, as required by law. The state’s Budget Reserve Fund now has a  $95,325,807 balance, and the Property Tax Reduction Fund has a $63,626,269  balance.

The  combination of those two funds, totaling $158,952,076, is the highest in state  history and represents a combined reserve of 12.3 percent of total general fund  spending for FY2013.

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