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A few takeaways from Daugaard’s budget proposal

December 2, 2014

SD Governor Daugaard just finished his budget proposal for FY16. I still need time to look through the details of the budget proposal, but overall I don’t think Daugaard did too bad of a job on this one.  There are some areas I disagree with, but most of those I will blog about during the legislative session when I analyze the bills the expenditures are tied to.

On the good side there is a 2% increase being given to education. That is .5% above inflation. Personally I think more should have been given to education as a way to increase teacher pay. But honestly, until school boards around the state start to take responsibility for their part in teacher pay I can’t see the state giving more money.

A low-light in this budgetary address was the reduction in revenue coming from the Unclaimed Property fund. Many of us felt this source of revenue was leaned upon too hard in the 2015 budget. It was project that in FY 2015 (which we are half way through) that only $5.5 million would be paid out to people wanting their money back. But so far this year $5.8 million dollars have been paid out. That caused the Governor to adjust the payout expectation from Unclaimed Property to $10 million in FY15. I hope the legislature will take note of this during the 2015 legislative session and not rely upon this money. Daugaard said this higher payout was due to an increase in awareness of Unclaimed Property. I think that is great, much of this money should never have been taken by the state…

Here is the chart looking at Unclaimed Property that Daugaard used:


Looking at the chart it can be seen that the state still uses a lot of Unclaimed Property money. Even with the extra payout to the rightful owners of this money, there is still $54 million that is being used by the state. Hopefully the legislature will remember this money is not truly theirs and is a potential liability when passing the budget this upcoming session.

The last thing I want to mention is highway funding. At the conclusion of his proposal Daugaard mentioned the highway summer study and that he was looking forward to the discussion. Senator Vehle is likely to push for a plethora of new and higher taxes to pay for infrastructure coming out of the summer study. The progression of that debate will impact how the overall budget looks. Perhaps that will end up taking away that extra .5 percent increase being proposed for education.

Over the 2015 legislative session it should be interesting to see how close the legislature will follow this budget. Personally I don’t think the legislature will put up much of a fight to any of Daugaard’s proposals. Any fights will likely revolve around changes to deal with the results of the highway summer study.

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