The most recent revenue figures for South Dakota tell two different stories.
November’s revenue numbers are either very good or very bad, depending on the projections used. Based on revenue projections adopted by the legislature during the 2019 legislative session, the revenue figures for November came in $8.7 million higher than projected, but utilizing Gov. Kristi Noem’s revised projections from her recent budget address, the figures were nearly $1 million behind their projection.
Unclaimed property receipts were the main difference in each projection and collection as in the legislature’s version the receipts were ahead by $7.8 million, while in the Governor’s projections the collections were $3.8 million behind, for a difference of $11.7 million between the two.
Gov. Noem’s year-to-date revenue collections follows similar figures to her November numbers with her revised projections for Fiscal Year 2020 nearly $1 million behind, however, following the legislature’s projections for year-to-date, revenue collections would be $5 million ahead.
These figures are of great importance to K-12 public schools as Gov Noem’s budget proposal for Fiscal Year 2021 does not include an increase for state aid and, while the current figures are associated with the FY20 budget, any amount above projection could factor into the FY21 budget.
South Dakota ended the Fiscal Year 2019 with a $19 million surplus so any additional revenue above projections for FY20 would put the legislature in a stronger position to provide school districts with an increase in state aid for next school year.
“The revenue figures are critical to schools,” ASBSD Executive Director Wade Pogany said. “The more dollars available, the more likely it is schools will receive an increase in state aid and we’ve heard Gov. Noem say she’s discussed with legislators the possibility of providing more funding.”
At her press conference following this month’s budget address, Gov. Noem noted “a one percent increase is $16 million” and added that she has had “conversations with legislators on how they are going to try to find ways to do more” in terms of funding increases.
State law requires schools to receive an annual increase in funding of three percent or inflation, whichever is less and Gov. Noem noted during the budget address that estimates for inflation over the next two years were somewhere between 1.9 and 2.1 percent.
The 2020 legislative session begins on Tuesday, January 14 with the main run of session concluding on Thursday, March 12. In between that time, the Joint Appropriations Committee will adopt revenue projections for FY21 on Thursday, February 13.
For updates on revenue projections, state aid, the FY21 budget and legislative session, check the ASBSD Blog.