Governor Dennis Daugaard is sounding the same cautious budgetary tone that he did last year, citing lower-than-expected sales tax revenues to lower expectations for his final budget address at the beginning of December.
In the first four months of this fiscal year, we’ve beaten Legislative revenue projections in two months but underperformed by larger margins in two others:
The Legislature assumed total revenue would grow 3.2% and sales tax in particular would grow 4.0%. Through the first third of FY2018, total revenue has grown 2.7% and sales tax has grown 2.1%.
Dollarwise, we’re down $8.33 million—1.5%—from where the Legislature thought we’d be. That’s enough to eat the entire $7.9-million surplus that the Governor celebrated in July. Still, we’re in a much better situation than we were at this point last year, when our October deficit alone was $8.71 million and revenue underperformance in all four months of the first third of FY2017 left us $19.94 million in the hole.
Interestingly, state government is working on a surplus, but not at a rate that compensates for lower revenues. Adding up expenditures on personal services and operating expenditures from the general fund, I find we’ve come in under budget so far by $2.10 million. Thus, the current trends would bring us to an end-of-year savings of $6.30 million in expenditures but $24.99 million less than expected in revenues, resulting in a budget deficit of $18.69 million.
So we’re probably still not signing up for Medicaid expansion, right, Dennis?