State Survives Sagging Sales Tax Revenue with $7.9-Million Surplus

It’s Blog One, Get Two Free! Here are three versions of the same story about South Dakota finishing Fiscal Year 2017 with a budget surplus of $7.9 million:

The Republican Partisan Version: Governor Dennis Daugaard announced today that his administration kept South Dakota’s budget balanced for the sixth year in a row. Conservative Republicans have used their frugality, self-reliance, and common-sense supermajorities to guide South Dakota to yet another responsible budget surplus. According to, [insert your favorite local Republican here], “This no-nonsense budgeting helps leave more money in the pockets of hard-working South Dakotans.”

The Democratic Partisan Version: Republicans continue their tradition of underfunding the vital public programs that South Dakota needs while transferring wealth from the pockets of hard-working South Dakotans to Pierre’s reserve slush funds. “We’d prefer that the Governor and Legislature spend more money to support the basic public services that citizens in other states enjoy,” said [insert your favorite local Democrat here]. “But when Republicans don’t even spend all the money they take from us taxpayers and instead squirrel it away in government mayo jars, something stinks in Pierre!”

Fiscal Year Surplus (million $)
2012 47.8
2013 24.2
2014 9.8
2015 21.5
2016 14.1
2017 7.9

The Non-Partisan Version: For the 127th time, South Dakota managed to do what two sections of the state constitution require: we didn’t let state expenses exceed state revenues. We still took in $7.6 million less than the downwardly revised revenue projection the Legislature adopted last March (the actual drop from what the Legislature , but state government managed not to spend $15.6 million that had been appropriated. Two thirds of those savings came from the the Department of Social Services providing less assistance than expected.

We actually took in $223K more in sales tax than the Legislature guesstimated in March. But the year-round sales tax figures remained disappointing. If sales had stayed flat, the sales tax increase from 4% in FY2016 to 4.5% in FY2017 would have produced an additional $107.6 million all by itself. The actual increase in sales tax revenue from FY2016 to FY2017 was only $90.3 million. Those figures indicate that taxable sales dropped in FY2017 by 1.79%.

Note that the budget adopted in 2016 for FY2017 appropriated $1.595 billion in general funds. Actual ongoing receipts were only $1.541 billion. A little subtraction tells me actual state expenditures were $1.562 billion. Saving us from a $21.6-million deficit was $29 million in one-time receipts.

10 Responses to State Survives Sagging Sales Tax Revenue with $7.9-Million Surplus

  1. I think your nonpartisan explanation is flawed. There are several times where South Dakota did let state expenses exceed state revenues, and instead spent down reserve funds. There can be a difference of opinion as to whether that is good or bad, but it is something this Administration and Legislature has sought to avoid, and I think they should get credit for meeting that goal (even if some think it is a poor goal).

  2. mike from iowa

    What’s the deficit w/o gubmint (US) funding?

  3. Ah, reasonable, JLB! How many years have we tapped reserves to balance the budget?

  4. Porter Lansing

    SoDak better raise taxes every year for a decade. This sales tax trend isn’t something to “sweep under the rug.”
    Who’s fault is it that no new ideas have been implemented to attract national commerce, additional revenue streams and new taxpayers? It ain’t the minority party. You’re going broke, South Dakota. Get a second job!! Cutting back the safety net makes people move away and that creates even less sales tax.

  5. Why doesn’t it make any sense that (according to the republican’s logic) businesses aren’t flocking to SD ?? We have no income tax. We have no corporate tax. We provide little in the way of government services. The ledge will do whatever the monied interests tell them to do. We are a republican paradise poster child. Seems that there’s something wrong here.
    … and how much of that accumulated $125+ million in surpluses was used in the past to balance the budget ?? Where’s the money now ??

  6. I don’t know how may times. But I know it has been done.

  7. Well, Buck, JLB is telling us that none of those reserves had to be dumped into this year’s budget.

  8. Ha ha ha ha. So taxing internet sales failed to bail out the morons.
    If they’d reign in their liberal tax loopholes for farmers, truckers, miners, etc., they’d have more than enough revenue – as many detailed.

    Maybe their regressive answer will be doubling the sales tax on food — as a cure for balancing the budget, reducing obesity, and paying for diabetic treatments. Oops, I should stop joking. Some will think that I’m thinking for them.

  9. The con is embedded in the cults mind on how to steal money from the needed programs to smoke and mirror it to a false surplus. Where is that money? Why do they keep it instead of putting it into projects instead of Game and Fish? Is this 7.9 million now going for the theft of Spearfish Canyon? Cult republicans never do anything that is for the people, just certain people.

    Here is your Medicare, Social Security, Food stamps, unemployment insurance, etc. What a laundry list of theft from the American people who depend on this to survive. One day there will be an awakening to the fact that we have been in a civil war in America between the rich and the rest of us. The rest of us means, can you financially survive 1 week to 6 months without income of any sort? Will you loose your home, your vehicles, all that is what you call, your property and dignity? This is once again, the wholesaling of America to the rich. How long will this be tolerated?

  10. The con is further embedded in how the rich and the rest of us continue to erode even further under cult supervision. The inequality is stunning and yes, it affects most of the citizens of this state. To my ag friends, without some kind of safety net, how long can you keep the barn doors on the place? What happens to your operation when the bank wants the keys to the John Deere? To big to fail, nope. We are the absolute worst, but we are damn good at selling ourselves as being something else through our mediums. The curtain is tattering that shelters the men behind it. As it frays, then the transparency appears as to what and how the con is being operated to deceive. The infomercial called Fox is telling in that they now say collusion with Russia is completely normal. Russia, a poor weak country with the same GDP as Spain, pulling the strings of what we are paying tax for.