Northwestern Area superintendent Ryan Bruns’s latest column mostly offers personal reflections on the coronavirus pandemic. He says the enormity of the public health crisis inclines him to “choose now to be quiet (mostly) this time around” about the state’s education budget.
Yet my local paper tags his column with a headline based on his closing suggestion: that maybe coronavirus and the concomitant and live-saving economic recession constitute the rainy day that justifies dipping into our state reserves:
If ever there is a time to dip in the rainy day fund, it would be now in this deluge, this monsoon we are experiencing. And if it’s not dipped into now, then don’t ever call it a rainy day fund ever again when talking about budgets, because it’s not one if it goes untouched now. Call it the never to be touched piggy bank of hoarders fund [Ryan Bruns, “Now Would Be a Great Time to Tap South Dakota’s Rainy Day Fund,” Aberdeen American News, 2020.04.16].
The reserves won’t get us far: the budget reserve and the general fund replacement fund equal less than the drop in state revenue we will suffer from a 10% drop in GDP. THose reserves also equal about 38% of the $491 million in state aid the Legislature authorized for state aid to K-12 education in March, before coronavirus destroyed all budget projections.
Related Fiscal Doodling: Governor Kristi Noem says sales have taken a “shocking” downturn, so talking about raising sales tax to boost revenues doesn’t sound like a great idea. But pre-coronavirus, the Bureau of Finance and Management estimated that our sales tax exemptions deny the state $1,469,883,662. That sounds like quite a reserve of wealth the state could tap (with some emergency legislation authorized in a June Special Session) to help ease the budget crunch.
Ya’ think? I don’t know why I, as a federal taxpayer in Wisconsin, should see my tax money going to bail out South Dakota when the Governor is doing everything in her power to make things worse there, and especially if that stash of money in the rainy day fund is not dried out. Lesson: don’t elect dullards and tax your own wealthy folks.
Who knows if there is any money in that account. We all hear about that wonderful account, but there is no accounting of it. I think it has already been shuffled off.
Retired state employees just received an ominous newsletter from SDRS indicating:
If benefit changes are required, our first priority is to preserve accrued benefits (benefits earned based on service to date) for all members. Our second priority is to favor temporary benefit changes that can be reversed, or will automatically reverse, if conditions improve, rather than permanent ones. Other objectives have been formalized to assure equity among members.
The Board met in early April and will continue to assess viable options during the rest of this year and adopt a formal plan to guide any SDRS recommendations to the 2021 Legislature. While the economic disruption may be temporary, we must plan for the possibility it will be long-term.”
Assuming there is money in that rainy day account, spend it. Activate Medicaid Expansion and we will all be better for it.
“Only a month ago, a stimulus bill of $2tn would have been unthinkable. Indignant deficit scolds would have asked how one planned to pay for it, and complained about burdening our grandchildren with debt and bankrupting our country. Bernie Sanders bent over backwards to explain how he was going to pay for a Green New Deal or Medicare for All. These programs don’t seem as expensive any more. Suddenly the government is planning “helicopter drops” of cash. Larry Kudlow, who relentlessly attacked the Obama stimulus during the global financial crisis, is touting the current stimulus as “the single largest Main Street assistance program in the history of the United States”.
Nobody is seriously asking how we are going to pay for this stimulus – and they shouldn’t. It took a global pandemic to explode the myth that federal government spending has to be “paid for”. https://www.theguardian.com/commentisfree/2020/apr/17/coronavirus-deficit-american-economy