The Joint Appropriations Committee received the new revenue projections from the Bureau of Finance and Management this week. The projection for this fiscal year, which Joint Appropriations will use to hammer together its adjustments to the current state budget, indicate that South Dakota state government will collect $250 million more from sales tax, contractor’s excise tax, unclaimed property, and other ongoing revenue streams than the Legislature budgeted for FY2023. BFM predicts an additional $125 million in unexpected one-time moneys.
The Legislature thus has $375 million more to allocate to state agencies to burn up before June 30.
The best thing to do with unexpected cash is take a trip to Hawaii, but legislators already have that covered.
The next best thing to do with unexpected cash is invest it. The investment that leaps to mind is a school lunch fund to pay for school meals for every public K-12 student in South Dakota.
Representative Kadyn Wittman proposed having the state cover the cost of every school meal not already covered by Uncle Sam. Her House Bill 1221 would have cost $38.6 million a year, and it would have been a smart, practical investment in children’s health and education, so Republicans killed it on a 14-1 committee vote.
Throw that entire $375 million in the bank, or better yet, into the capable hands of Matt Clark and the South Dakota Investment Council. They’ve made South Dakota’s pension funds grow at an annual rate of 8.9% over the last decade, and that includes the covid stock market dip. Inflation has averaged 2.6% over the past decade, and that includes the covid/supply-chain inflation of the past couple years. Apply the SDIC return rate to the $375M of unexpected revenue, apply that inflation rate to the cost of HB 1221, and you will see that sinking the current overage in the state budget into school lunches would pay for HB 1221 through FY2044, by which time South Dakota would have had 21 years to rack up more unbudgeted windfalls to spend on
Hawaii school lunch and other important public policies.
Representative Wittman, round up your friends and smoke out HB 1221. We have the money to feed every school kid in South Dakota for 21 years.