The Bureau of Finance and Management warned legislators last summer that the coronavirus pandemic could cause South Dakota to see up to a $40-million budget shortfall:
The South Dakota budget could see revenue shortfalls between $16 million and $40 million during the next year due to the coronavirus pandemic, lawmakers were briefed on Wednesday.
While Gov. Kristi Noem announced last week that the state budget that wrapped up June 30 had a $19 million surplus, revenues were bolstered in part from federal relief money for addressing the pandemic. Economic analysts warned that as federal stimulus programs expire, sales tax revenue could decrease in the coming months. The Republican governor has said that a special legislative session may be necessary to adjust the budget [Stephen Groves, “South Dakota Budget Analysts Predict Revenue Shortfalls,” AP, 2020.07.22].
It’s not unusual for the state to end the year with leftover funds that carry over to the next year’s budget. Between 2013 and 2019, South Dakota averaged an annual surplus about $16.7 million, the highest single-year amount during that time coming in 2013 when the state banked $24.2 million.
This time around, that figure could be between $150 and $200 million, and no less than $70 million, based on revenues projections from the Bureau of Finance and Management.
“It’s huge,” said Sen. Jim Bolin, R-Canton, of the pot of surplus money at the state’s disposal [Joe Sneve, “What to Do with State’s Upcoming, Record-Shattering Surplus? Noem’s Plan Yet Unknown,” that Sioux Falls paper via Aberdeen American News, both paywalled, 2020.12.06].
This amazing surplus comes not from effective state leadership—Governor Kristi Noem spent much of last week campaigning and rodeo-pageanting in Texas—but from the massive socialist federal response to the coronavirus pandemic and our state’s misappropriation of that money to cover our regular budget expenses instead of providing additional pandemic relief to South Dakotans harmed by coronavirus:
“These are one time dollars that are a result of using the coronavirus dollars, that we are allowed” under the terms of the CARES Act, said longtime Yankton legislator and appropriations committee member Jean Hunhoff, who will begin a new tenure in the Senate in 2021 after terming out of the House of Representatives for a second time.
“A majority of those dollars went to salaries” she said [Sneve, 2020.12.06].
Possibly $200 million dollars that should have gone to meeting the increased public health needs of South Dakotans instead gets left on the table as another faked feather in Kristi Noem’s campaign cap.
And stunningly, Sneve reports that the state has spent only $427 million of the $1.25 billion in CARES Act relief dollars. If that number is right, if we add our looming state surplus to our incredibly unspent coronavirus relief (and really, it’s all federal CARES Act money, because we wouldn’t have a surplus if the feds hadn’t sent us that $1.25 billion), then South Dakota is actually sitting on possibly over a billion dollars that could be put toward helping save South Dakotans’ lives and reduce the impact of the coronavirus pandemic.
I modify my October proposal to provide put these moldering dollars to good public pandemic use:
- Send $200 million to the schools to hire the teachers, tutors, and ed tech specialists they need to offer safe, robust hybrid and online education.
- Allocate $200 million to cover the hospital bills of every South Dakotan afflicted with coronavirus. (I double this funding from my earlier proposal because of the exponential growth of cases our state has allowed to happen without serious Executive intervention over the last two months.)
- Spend another $100 million to provide more educational technology to support current pandemic adjustments and invest in ongoing online education capacity.
- Send $100 million to schools and local governments for personal protective gear and building improvements to protect public health.
- Allocate all remaining CARES Act dollars to a workers-stay-home fund: lockdown all non-essential businesses for one month and pay their workers $600 a week to cover their bills until we have crushed community spread of coronavirus.
A surplus (especially a fake stimulus achieved by not using federal emergency assistance to address the targeted emergency) is nothing to cheer about until we do something good with it. And we shouldn’t be cheering until we have followed Melbourne, Australia’s example and eradicated covid-19. Let’s put our remaining CARES Act dollars to work the way Congress intended.