In his last budget address as governor, Dennis Daugaard recommends a $4.8 billion budget for the 2020 fiscal year.
That’s what he told the South Dakota Legislature Tuesday afternoon. On average, it is a 2.3 percent increase ($94 million) over last year.
About two thirds of the state’s budget is tagged for state aid for education (47.6 percent) and health, human and social services (35 percent).
Daugaard says the proposed budget is more what the state “needs” rather than what it “wants.” It is also a starting point for incoming Gov. Kristi Noem.
What is missing in action from Daugaard’s budget is estimation on e-commerce (online) sales tax revenue. This, the governor stated, is tough to forecast until there is some history with it. The state estimates it may collect $23 million in e-commerce sales tax. Daugaard did hint there may be up to $13 million more in tax revenue from online sales tax.
Overall, the state is expecting an increase in revenue because the economic forecast for South Dakota remains positive; and is expected in the next two years to grow at a pace similar to the nation. Trade policies, according to the state’s budget summary, could put growth at risk because of negative impacts on crop prices.
Noem and legislators will hash out the details in the upcoming Legislative session that begins Jan. 8 when Noem gives her first state of the state address. According to an Associated Press story, Noem is working on her own plan to be debated in the upcoming session.