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South Dakota Budget

Gov. Dennis Daugaard delivers his budget address at the state Capitol in Pierre in December. Daugaard says the state budget for fiscal year 2018 will have to be "pretty lean."

PIERRE | For two months in a row, the revised fiscal 2017 state revenue estimate adopted by the Legislature in February has come up short.

The state Bureau of Finance and Management this week issued its April report showing weaker results than expected. General fund collections totaled $92 million for February and $93 million for March.

The Legislature in February estimated $102 million would be collected for February and $97 million for March. The shortfall is approximately $14 million.

“There’s still some softness in the revenue,” state economist Jim Terwilliger said Wednesday. “We continue to be challenged in the e-commerce.”

The lack of inflation is another factor. It’s not leading to much growth in the sales tax base, Terwilliger said.

“From 2007 to 2014, we had really strong (farm) income,” Terwilliger continued. “You’re just seeing some adjustments going on in the ag economy. It takes some time to adjust to those lower prices.”

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South Dakota farm income peaked in 2011 at $3.8 billion, fell to $1.8 billion for 2015 and slid to $800 million in 2016, according to the report.

Liza Clark, commissioner of finance and management for Gov. Dennis Daugaard, said it’s too early to forecast where state government finishes fiscal 2017 come June 30.

“It’s still pretty preliminary. We still have three months of revenue to come in,” Clark said.

The cumulative shortfall for fiscal 2017 was $43.5 million in February. The Legislature then adopted its revised estimate.

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