Legislature faces budget problems

Chronicle Staff

Published: Wednesday, January 14th, 2009

The first day of the 2009 Legislative Session in Pierre kicked off Tuesday, Jan. 13, with lawmakers facing budget constraints everywhere they looked. Gov. Mike Rounds said last week he is going to have to revise his proposed state budget for the next fiscal year because of declining tax revenues. There is no choice but to cut spending in order to keep revenue in line with expenses. Families have to do it and government must do it also. Specifically, sales tax revenue in December was down 7.5 percent from projections, video lottery down 5.3 percent, contractor excise tax payments  down 8.4 percent, insurance company taxes down 24.4 percent and bank franchise taxes about 48 percent below expectations. This month probably won’t be a whole lot better. South Dakota’s fiscal year ends June 30, so spending will have to be cut in order to stay within budget constraints. The state’s constitution does not permit deficit spending of any kind. If spending is projected to exceed revenues, there is a provision for an emergency statewide property tax to be imposed by the Legislature as a last resort. Ways will have to be found to decrease spending and it will be painful. A trimmed budget will then have to be proposed for the new fiscal year beginning July 1. Something tells us this will not be a pleasant session for either the Governor, Legislators or their constituents. As always, there will be cases made for new taxes and increased fees to make up the shortfall. Unfortunately, once these new taxes and higher fees are in place, they will never be recinded or lowered. Government spending will rise to meet the new revenue numbers. Gov. Rounds is expected to present a new and revised budget to Legislators in the next few weeks. There are bound to be many programs that will have to be trimmed or cut out entirely if the state is to remain fiscally responsible. District 30 Reps. Mike Verchio of Hill City and Lance Russell of Hot Springs realize the budget challenges they face, as does Sen. Gordon Howie of Rapid City. All three District 30 lawmakers are well aware of the unique situation the Legislature faces this year in the midst of a national recession. Sacrifices will have to be made because this is not a “business as normal” year, by any means. One thing is certain. We are all in this together. Every segment of our state’s economy has been affected by the sudden economic downturn. We will get through this by working together and making some sacrifices, both personally and collectively.