South Dakota Budget

In this Dec. 28, 2016, file photo, South Dakota Gov. Dennis Daugaard describes his priorities for the rest of his term at the state Capitol in Pierre. Daugaard said Monday that money will be tight for South Dakota's current and upcoming budget years ahead of his yearly budget address to the state Legislature on Tuesday, Dec. 5. 

James Nord, AP file photo

PIERRE | Gov. Dennis Daugaard said Monday that money will be tight for South Dakota's current and upcoming budget years ahead of his yearly budget address to the state Legislature.

Lawmakers will revise this year's budget and shape the next one during the 2018 legislative session. The Republican executive is set to outline his spending priorities to lawmakers at the state Capitol on Tuesday.

Daugaard said that officials will have to "tighten our belt" for the current budget year and be "very judicious" with the money available for 2019. Daugaard said that he will not be recommending cuts, but rather reducing the projected growth of some state expenses.

"We need to remember that South Dakota still is in good shape," Daugaard told The Associated Press ahead of the address. "Maybe we're not as able to fulfill all our wishes, but I would say we are still fulfilling our needs."

Recently released state figures show that revenues for the first four months of the current budget year are roughly $8.3 million, or 1.5 percent, below expectations due in large part to short sales tax receipts. Sales tax is the state's main revenue source.

The figures through October also show that a tax imposed on construction contractors has brought in roughly $2 million, or 4.6 percent, less than lawmakers had previously anticipated, while tobacco taxes and an insurance company tax are also among the state receipts down from projections.

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Lawmakers also dealt with sluggish state tax collections in the 2017 legislative session. But South Dakota ended the 2017 budget year in June with a surplus built on state spending reductions after Daugaard asked agencies to cut expenditures in the face of weaker-than-anticipated revenues.

The session that starts in January and ends in late March is Daugaard's last as governor. He can't run again next year because of term limits and leaves office in 2019.

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