PIERRE | South Dakota's state government ended the last budget year with a $47.8 million surplus after tax collections exceeded expectations and state agencies spent less than they were authorized to spend.
Gov. Dennis Daugaard said revenue for the year that ended June 30 was $24 million higher than the South Dakota Legislature projected in March, when lawmakers adjusted the budget. State agencies also spent $13.8 million less than the budget authorized them to use. In addition, the Legislature intentionally left $10 million unspent to replenish state reserve funds that were used to deal with last year's flooding along the Missouri River and the mountain pine beetle infestation in the Black Hills.
That means revenues exceeded expenses by $47.8 million for the year, Daugaard said. That money has been transferred to the budget reserve fund as required by law, he said.
"We continue to meet the goal of balancing the budget in a conservative manner without raising taxes," Daugaard said in a written statement.
The governor said he is pleased that South Dakota's economy is strengthening faster than projected. The improved economy and growth in tax revenue means the state can continue to increase spending in important areas such as education, public safety and Medicaid, the state-federal program that cover health care costs for low-income people, he said.
Daugaard said sales tax collections, the state's largest revenue source, continued to grow in recent months, as South Dakota's economy expanded even in the midst of global economic uncertainty. The state collected $744.4 million in sales tax for the year, up 4.8 percent or $34.2 million from the previous year.
Bank franchise tax revenue grew by $25 million for the year, and the contractor's excise tax brought in $17.3 million more than a year earlier. Video lottery, the only major revenue source to decline, was down $7.9 million.
Daugaard said total state general fund receipts were $1.28 billion for the year.
With the transfer of $47.8 million, the budget reserve fund now holds nearly $71.1 million, Daugaard said. Another reserve account, the Property Tax Reduction Fund, has a balance of $63.6 million, giving state government total reserves of $134.7 million in the two funds.