Remember a couple weeks ago when we were fretting about whether teachers would get their statutorily required 2% raises in the coming fiscal year? Kiss that goodbye—Joint Approps members are telling SD News Watch that, thanks to coronavirus, we’ll likely see a special session to revise the FY2021 budget way way down:
The increasingly dire economic news has led legislators to anticipate that drastic changes may be needed to the state budget lawmakers just passed for the 2020-2021 fiscal year, which begins July 1. Adjustments to the budget could include revision or elimination of the 2% pay increase for teachers, state employees and Medicaid providers originally included in the spending plan.
…Democratic state Sen. Reynold Nesiba of Sioux Falls said he thinks Gov. Kristi Noem may ask the Legislature to totally or at least partially re-write its 2021 budget bill. Doing so, he said, would require both the Bureau of Finance and Management and the Legislative Research Council to create new revenue projections based on sales tax collection data from March and April. That data, though, won’t be available until sometime in May or even June.
“I don’t think we can reopen a general budget discussion on veto day [March 30] and pass that,” said Nesiba, who also sits on the Joint Appropriations Committee. “I just don’t think we have enough information” [Nick Lowrey, “SD May Need Special Session for Budget,” South Dakota News Watch, 2020.03.25].
I’ll gently remind legislators that wages for teachers are pretty good local stimulus dollars… but then I’ll acknowledge that if the money isn’t there, it isn’t there. As long as we don’t allow deficit spending for state-level economic stimulus or relief, we’re stuck with revenues and state spending that will drop by double-digit percentages.
Buildings also provide some stimulus by keeping construction crews on the job, but our universities may see their building plans halted on Veto Day:
Rep. Chris Karr, R-Sioux Falls, co-chair of the joint committee, was more definitive. He said some one-time spending, such as for new university buildings that were added to the existing year’s budget, likely will be cut by March 30 [Lowrey, 2020.03.25].
In other economic news, South Dakota saw unemployment claims jump ninefold last week, from 190 to 1,703. Nationally, unemployment claims jumped 11.6 times over the previous week, from 282,000 to 3,283,000.