Starting in about 10 minutes, you can join Governor Larry Rhoden’s Telephone Town Hall and find out more about his campaign and his agenda for the coming term. Once the call starts at 7pm you can join by calling 888-886-6602
What South Dakota’s Budget Surplus Really Means
By Representative Chris Kassin
Each year when South Dakota closes its books, one question inevitably follows:
“If the state ended the year with a $69 million surplus, why didn’t we spend that money?”
It is a fair question and one I hear often from constituents. The answer begins with understanding how South Dakota builds its budget.
Unlike the federal government, South Dakota cannot simply borrow money to cover a deficit. Our Constitution requires a balanced budget. Every year, the Legislature must estimate how much revenue the state will collect and build a budget that does not spend more than that amount.
That estimate is not simply handed down by the Governor. Each February, the Governor’s Bureau of Finance and Management (BFM) and the nonpartisan Legislative Research Council (LRC) independently develop revenue forecasts using different economic models. Those forecasts are presented to the bipartisan Revenue Projection Subcommittee, a subcommittee of the Joint Committee on Appropriations (JCA), which reviews the data and adopts the official revenue estimate used to build the state budget. After carefully reviewing the information presented, the legislature sets the revenue estimate.
That estimate is made months before the fiscal year even begins. By the time the budget year ends, we have been forecasting revenues and expenditures as much as 17 months into the future. Anyone who has tried to predict where the economy will be a year from now knows that is no easy task.
Could we assume the economy will grow faster? Could we budget another $50 million or $100 million because we hope sales tax collections will exceed expectations?
Of course we could.
It would also be one of the most fiscally irresponsible things we could ever do.
Building a budget on revenue you hope to collect instead of revenue you reasonably expect to collect creates the risk of budget shortfalls, spending reductions, and emergency adjustments after commitments have already been made. That’s why South Dakota follows a budgeting process built on conservative, realistic revenue estimates.
This year’s surplus illustrates why.
Some have suggested the $69 million surplus proves the Legislature overbudgeted or failed to spend money that could have helped South Dakotans. That simply is not how the budget works.
The surplus represents only about 2.75 percent of South Dakota’s $2.5 billion general fund budget. Considering we are forecasting nearly a year and a half into the future, that reflects remarkable accuracy.
One of the largest contributors to the year-end balance was the Department of Social Services. The Legislature budgeted enough funding to ensure eligible South Dakotans could receive needed services. Fortunately, actual demand was lower than projected. Fewer people qualified for certain programs, utilization was below expectations, and some services cost less than anticipated. The budget represented prudent planning that ensured services could be provided if needed. The funds were not spent because the demand never materialized.
Healthcare budgeting makes this especially difficult. A handful of catastrophic medical cases can add millions of dollars in costs, and no forecasting model can predict exactly when those expenses will occur.
Good budgeting is not measured by whether every dollar gets spent. It is measured by whether the state has the resources to meet its obligations while protecting taxpayers from unnecessary financial risk.
No forecast will ever be perfect. Economies change. Healthcare utilization changes. Unexpected events happen.
No one can predict the future with perfect accuracy. Our job is to make the best decisions we can with the information we have at the time.
South Dakota has earned one of the strongest fiscal reputations in the nation because we refuse to build budgets on wishful thinking. We build them on evidence, careful analysis, and disciplined forecasting. I believe that approach has served our state well, and it is one worth protecting.
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Representative Chris Kassin represents District 17 in the South Dakota House of Representatives. He serves on the Joint Committee on Appropriations and the Legislature’s Revenue Projection Subcommittee, where he helps develop the state budget and revenue estimates.
André Zachariahs Announces Campaign for South Dakota House in District 15
SIOUX FALLS, SD – André Zachariahs announced that he is a candidate for the South Dakota House of Representatives in District 15, launching a campaign focused on strengthening families, supporting thriving communities, and leaving the next generation with even greater opportunity.
“What kind of South Dakota will our kids inherit?” Zachariahs said. “That’s the question I keep asking myself. As stewards of the future, every decision we make today shapes the opportunities they’ll have tomorrow.”
Zachariahs and his wife, Carrie, are raising four boys in Sioux Falls, an experience he says has shaped both his priorities and his perspective on public service.
“I don’t think most parents wake up thinking about politics,” he said. “They’re thinking about getting everyone out the door in the morning, making it to work, helping with homework, paying the bills, and trying to build a good life. Good government should make those things a little easier, not a little harder.”
Zachariahs said the values that have guided his family are the same values that will guide his approach to public service.
“Over the years, I’ve come to believe that healthy communities are built by listening well, caring deeply, and investing in the people around us,” he said. “That’s the approach I’ll bring to the Legislature.”
He said his campaign will focus on ensuring South Dakota remains a place where families can build a future, businesses can grow, communities can thrive, and the next generation has every opportunity to succeed.
“I want my boys to have the same, or better, opportunities I had growing up here,” Zachariahs said. “That doesn’t happen by accident. Every generation has a responsibility to leave something better for the next one.”
As the campaign gets underway, Zachariahs said he looks forward to continuing to meet with and listen to residents across District 15, hearing their ideas, learning from their experiences, and earning their trust.
“Good leadership starts with listening,” he said. “The people of District 15 bring different experiences, perspectives, and ideas to the table. I look forward to learning from them and working together to keep South Dakota a place where families can thrive, and future generations have every opportunity to succeed.”
For more information about the campaign, visit AndreforHouse.com.
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Johnson Targeted by Biden DOJ’s Arctic Frost
Washington, D.C. – Today, U.S. Representative Dusty Johnson (R-S.D.) released the following statement regarding Operation Arctic Frost in which President Joe Biden’s Department of Justice officials obtained and reviewed the Congressman’s text messages. The investigative team improperly reviewed the messages of 44 Members of Congress.
“My text messages obtained by Jack Smith’s rogue investigation team shows an unprecedented level of carelessness for the rule of law and the constitutional separation of powers,” said Johnson. “I’m grateful to the whistleblowers who brought these acts to light and to the Senate Judiciary Committee for continuing this Congressional oversight.”
Johnson will review the classified information obtained by the Justice Department.
Background:
The U.S. Senate Committee on the Judiciary released evidence that the United States Department of Justice Special Counsel investigation lead by Jack Smith improperly obtained and reviewed text messages from Members of Congress from across political lines.
The Justice Department’s letter to Senate Judiciary Committee Chairman Chuck Grassley can be viewed here.
The full press release from the Senate Judiciary Committee can be viewed here.
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This is hot off the press.
In polling that was performed from July 6-9 among 500 likely voters with a margin of error of 4.38% for the Rounds Campaign, Rounds is predictably way ahead of the office-seekers.
(It’s all personal interview polling, not electronic, so I give it a bit more pause than some of the others.)
Why should this get our attention? About a month ago, nine-year South Dakota resident and six-year U.S. Senate candidate Brian Bengs released a push poll paid for by his out of state donors that the Independent Bengs used to beg the actual Democrat candidate Julian Beaudion to exit the race.
In a nutshell, Bengs complained that If everyone will just quit, I can win! Well, no.
If you look at the poll where they spoke with actual people, it appears that Julian Beaudoin has a stronger argument than “Third Place” Bengs, because Bengs is the one who is trailing the field. By 3 points in an internal poll conducted by the Rounds campaign. While I didn’t have the cross-tabs shared with me, I’m told this was a straight up questionnaire, with no push questions on the initial ballot test.
What was shared, is that in a straight up head to head contest – supposedly what Bengs wants – Rounds crushes him 56-33. When they start pushing test messages where voters learned of Bengs’ liberal, socialist views on abortion, taxes, guns and Obamacare expansion – Bengs gets crushed by even more with Rounds coming out 63-31.
I did reach out to the campaign about the poll, and was told that “Julian has better than 3:1 support from base democrats over Bengs. Democrats and Independents aren’t buying what Bengs is peddling. Mike actually wins with independents too, because Bengs is such a radical. They’ve already decided that he’s a phony. Julian on the other hand, is very popular with his base and very likable – unlike Bengs. If Bengs wasn’t such an anti-competition whiner, I’d never suggest the democrat candidate has more appeal,” said Rob Skjonsberg, a long time Rounds advisor.
Bengs might think he has a winning message trying to push the guy ahead of him out of the contest. But that’s not the case.
So far to date, despite using Democrat party tools to try to siphon cash from the Democrat base in support of his non-party campaign, Bengs has so far bungled the race.
Business Groups Concerned with Property Tax Scheme
Sioux Falls, SD – A broad coalition of business groups has expressed concern with statements made by gubernatorial candidate Toby Doeden regarding the elimination of nearly $2 billion in local property taxes by cutting funding for schools, counties, and cities and implementing new taxes on visitors.
In response to survey questions and in conversations with business groups, Doeden has pledged “aggressive spending reductions” to local governments while seeking “additional sources of revenue.”
Doeden has claimed that families would “pay any price in the world” to come to South Dakota and that “it’s time for tourists and out-of-state visitors to pay their fair share . . . we will be obtaining new revenue from tourists that come here to enjoy our beautiful state.”
Eliminating nearly $2 billion in funding for schools, counties, towns and other local needs – which is the equivalent of roughly 80 percent of the general fund budget for the State of South Dakota – with cuts and new taxes would negatively impact infrastructure and place even greater strain on local businesses.
“South Dakota’s business community has spent decades building a reputation for fiscal discipline and sound governance,” added Ryan Budmayr, President of the South Dakota Chamber of Commerce & Industry. “We support real tax relief, but any plan of this size needs to be grounded in real numbers so families and businesses can trust it will actually work.”
“A one percent statewide sales tax raises about $350 million,” said Nathan Sanderson, Executive Director of the South Dakota Retailers. “To replace $2 billion in local property taxes would require a nearly 6% sales tax rate on top of our current sales taxes and if it’s applied more narrowly it would need to be much, much higher. This would crush businesses and cripple our state’s No. 2 Industry.”
“Property taxes fund schools, counties, towns, and other local needs,” said Garth Wadsworth, Senior Public Policy Director of Elevate Rapid City. “We need to educate our kids, maintain county roads, and repair necessary infrastructure; we cannot cut all of these services.”
“Infrastructure is the backbone of commerce,” said Jeff Griffin, President and CEO of the Greater Sioux Falls Chamber of Commerce. “Cutting infrastructure while raising taxes would have a very negative effect on South Dakotans.”
“A new consumption tax on visitors would make South Dakota less competitive, increase the cost of visiting our state, and reduce visitor spending—while the logistics of determining who is a visitor could also result in unintended costs and impacts for South Dakota residents,” said Carmen Schramm, Executive Director of the Tourism Coalition of South Dakota.
“This plan is simply not workable,” said Mike Bockorny, Executive Director of the Economic Development Professionals of South Dakota. “Small businesses, local restaurants, gift shops, hotels, coffee shops, book stores, and attractions across the state would be devastated. This is not the right approach for South Dakota.”
Groups expressing concern about Doeden’s property tax scheme include:
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Ever wanted to get into the go-cart business? It appears that Thunder Road, long owned by the Novstrup family, is selling out in Aberdeen:
Of course, this comes around a month after Al Novstrup was not selected in the primary election to return to District 3 House, but it’s still a surprise nonetheless.
We’ll see if it continues. I suspect they’re finding the indoor ventures are much more profitable with a year-round cash flow, versus the seasonal aspect of the operation.
Thune Celebrates America’s 250th Birthday
“May God bless our beloved country and keep us faithful to the principles for which we stand.”
WASHINGTON — U.S. Senate Majority Leader John Thune (R-S.D.) today delivered the following remarks on the Senate floor:
Click here to watch the video.
Governor Larry Rhoden is hosting a meet & greet campaign event in Brookings this next Monday at the SDSU Research Park for those so inclined, as we wind down the longest primary contest in State History.
Toby Doeden had an event here this week as well, but you had to sign up to find out the secret location. Which after seeing it, it looks like the free food and drink event was at Cubby’s. I’m not sure why that was a state secret. If I see an invite, I typically post it. But without a location? It’s a campaign event at the local sports-bar eatery, so I’m not sure why they wouldn’t tell anyone.
Almost over! 12 days to go!
“The paid-off media is attempting to influence the outcome of this election with a very fake poll,” he said.
That stands in contrast to his reaction following the May 21 release of a KELO/Emerson poll that showed him leading with 26% support in the four-way primary race.
“KELOLAND News shows us leading in their latest poll,” Doeden posted on Facebook at the time, while sharing a bar chart of the poll results. “Our internal polling looks even better.”