South Dakota state budget and finances

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South Dakota budget and finances
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General information
Budget calendar:
Annual
Fiscal year:
2015
State credit rating:
AA+ (as of 2014)
Current governor:
Dennis Daugaard
Financial figures
Total spending (state and federal funds):
$4.1 billion (estimated for 2014)
Per capita spending:
$4,792.69 (estimated for 2014)
Total state tax collections:
$1.5 billion (2013)
Per capita tax collections:
$1,813.89 (2013)
State debt:
$7.7 billion (as of 2014)
Per capita state debt:
$9,249 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in South Dakota
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.

Between fiscal years 2013 and 2014, total government spending in South Dakota increased by approximately $26 million, from $4.063 billion in fiscal year 2013 to an estimated $4.089 billion in 2014. This represents a 0.6 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned South Dakota a credit rating of AA+.[1][2][3]

In 2013, South Dakota's state tax collections per capita equaled $1,814, the fourth-lowest in the nation.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

In South Dakota in fiscal year 2014, estimated per capita spending equaled $4,792.69, a smaller amount than in any neighboring state.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
South Dakota $2,669 $1,420 $4,089 853,175 $4,792.69
Minnesota $25,861 $9,492 $35,353 5,457,173 $6,478.26
Nebraska $7,725 $2,817 $10,542 1,881,503 $5,602.97
North Dakota $5,186 $1,590 $6,776 739,482 $9,163.17
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013.
Source: National Association of State Budget Officers

State spending in South Dakota can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[3]

In fiscal year 2013, higher education accounted for approximately 22.3 percent of South Dakota's total expenditures.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
South Dakota 14.1% 22.3% 0.7% 19.9% 2.5% 15% 25.5%
Minnesota 29.2% 4.7% 1.4% 24.3% 1.5% 10.7% 28.2%
Nebraska 14.6% 23.3% 0.5% 17.9% 2.2% 7.8% 33.6%
North Dakota 15% 19% 0.1% 13.7% 1.9% 16.1% 34.2%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 to 2013, the share of the South Dakota state budget spent on higher education increased from 19.0 percent to 22.3 percent. See the table below for further details (figures are rendered as percentages, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percentages)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 14.1% 22.3% 0.7% 19.9% 2.5% 15% 25.5%
2012 14.3% 17.7% 0.8% 20.9% 2.7% 15.9% 27.7%
2011 16.3% 18.4% 0.8% 20.7% 2.6% 15.0% 26.1%
2010 15.4% 17.3% 0.8% 21.7% 2.8% 13.7% 28.5%
2009 16.7% 19.0% 0.8% 21.7% 3.0% 12.9% 26.1%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

When compared to nearby states, South Dakota had the lowest total state tax collections at $1.5 billion.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
South Dakota N/A $1,228,262 $257,220 N/A $37,172 $11,009 $1,533,663 845,510 $1,813.89
Minnesota $821,799 $8,289,780 $1,184,465 $8,950,755 $1,363,128 $421,882 $21,031,809 5,422,060 $3,878.93
Nebraska $148 $2,197,988 $130,762 $2,101,694 $275,563 $12,789 $4,718,944 1,868,969 $2,524.89
North Dakota $148 $2,197,988 $130,762 $2,101,694 $275,563 $12,789 $4,718,944 1,868,969 $2,524.89
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
South Dakota tax collections by source in 2013.
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Approximately 80 percent of South Dakota's state tax collections came from sales taxes and gross receipts.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
South Dakota N/A 80.09% 16.77% N/A 2.42% 0.72%
Minnesota 3.91% 39.42% 5.63% 42.56% 6.48% 2.01%
Nebraska 0.00% 46.58% 2.77% 44.54% 5.84% 0.27%
North Dakota 0.05% 33.28% 3.92% 12.11% 4.26% 46.38%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

See also: Historic South Dakota budget and finance information

Fiscal year 2015

DocumentIcon.jpg See budget bill: SB 187

Governor Dennis Daugaard announced his fiscal year 2015 budget proposal on December 3, 2013. Under the governor's proposal, total spending for fiscal year 2015 would have equaled approximately $4.28 billion, including $1.39 billion in general fund spending.[10]

On March 31, 2014, Daugaard signed into law the fiscal year 2015 budget. The enacted budget totaled $4.259 billion, a 4.7 percent increase over fiscal year 2014.[10]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, South Dakota had a state debt of approximately $7.7 billion. Its state debt per capita was $9,249. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[11]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
South Dakota $7,707,458,000 $9,249 46
Minnesota $85,879,526,000 $15,965 21
Nebraska $13,139,045,000 $7,081 49
North Dakota $9,263,742,000 $13,241 30
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: South Dakota public pensions and South Dakota public employee salaries

South Dakota public pensions are the state mechanism by which state and many local government employees in South Dakota receive retirement benefits. In South Dakota, there is one state-run system, administered by the South Dakota Retirement System (SDRS). The system administers one plan: the South Dakota Public Employees Retirement System.

As of the end of June 2012, South Dakota public pensions had total estimated liabilities of $8.4 billion dollars, and had 92.6 percent of those liabilities funded, resulting in unfunded liabilities of $625 million.[12]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[13][14]

The table below lists the Standard and Poor's credit ratings for South Dakota and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[15]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
South Dakota AA+ AA+ AA+ AA+ AA AA AA AA AA
Minnesota AA+ AA+ AA+ AAA AAA AAA AAA AAA AAA AAA AAA
Nebraska AAA AAA AAA AAA AA+ AA+ AA+ AA+ AA+ AA+ AA+
North Dakota AAA AAA AA+ AA+ AA+ AA+ AA AA AA AA AA-
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[16]

The table below notes what share of South Dakota’s general revenues came from the federal government in 2012. That year, South Dakota received approximately $1.6 billion in federal aid, 40.84 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[16]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
South Dakota $1,630,220 40.84% 4
Minnesota $9,608,018 28.13% 39
Nebraska $3,141,413 34.22% 22
North Dakota $1,750,134 24.76% 45
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[17][18]

  1. Budget instruction guidelines are sent to state agencies in June and July of the year preceding the start of the new fiscal year.
  2. State agencies submit their budget requests to the governor in September.
  3. Agency hearings are held in September and October.
  4. The governor submits his or her proposed budget to the state legislature in December.
  5. The legislature typically adopts a budget in March. A simple majority is required to pass a budget. The fiscal year begins July 1.

South Dakota is one of 44 states in which the governor has line item veto authority.[18]

The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to pass a balanced budget.[18]

Agencies, offices and committees

The following standing committees in the South Dakota State Legislature deal with budget and finance matters:

  1. Appropriations Committee, South Dakota House of Representatives
  2. Appropriations Committee, South Dakota State Legislature
  3. Appropriations Committee, South Dakota State Senate
  4. Taxation Committee, South Dakota House of Representatives

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[19] According to the report, South Dakota received a grade of B+ and a numerical score of 89.5, indicating that South Dakota was "advancing" in terms of transparency regarding state spending.[19]

Budget and finance ballot measures

Voting on
state and local
government budgets,
spending and finance
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Policy
Budget policy
Ballot measures
By state
By year
Not on ballot
See also: State and local government budgets, spending and finance on the ballot and List of South Dakota ballot measures

Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in South Dakota.

  1. South Dakota Budget Balance Amendment, Constitutional Amendment P (2012)
  2. South Dakota Cement-Plant Trust Amendment, Constitutional Amendment O (2012)
  3. South Dakota Civil Township Debt Limit (1896)
  4. South Dakota Committee for Appropriated Funds, Amendment B (1998)
  5. South Dakota Debt Limit for Internal Improvements (1936)
  6. South Dakota Debt for State Development (1918)
  7. South Dakota Depositors Guarantee Fund (1926)
  8. South Dakota Educational Fund Investments (1950)
  9. South Dakota Educational Fund Investments (1952)
  10. South Dakota Educational Fund Loans (1944)
  11. South Dakota Educational Funds, Amendment C (1994)
  12. South Dakota Endowment Land Lease Money (1942)
  13. South Dakota Fines and Interest Rates on School Land Sales, Amendment B (1982)
  14. South Dakota Healthcare and Education Trust Funds, Amendment B (April 2001)
  15. South Dakota Investment of Education Funds, Amendment A (1996)
  16. South Dakota Investment of Permanent School Funds (1940)
  17. South Dakota Investment of Permanent School Funds (1942)
  18. South Dakota Investment of School Funds, Amendment E (2000)
  19. South Dakota Investment of School Funds, Amendment G (1998)
  20. South Dakota Investment of School Funds by Counties (1900)
  21. South Dakota Investment of School Money (1904)
  22. South Dakota Lease Money and Land Income (1942)
  23. South Dakota Lower Interest Rate on School Funds (1902)
  24. South Dakota Municipal Debt Limits for Water, Street Railways and Lighting (1902)
  25. South Dakota Municipal Debt for Street Railways and Lighting (1920)
  26. South Dakota Pooling Lease Money (1954)
  27. South Dakota Prohibit State from Extending Credit (1934)
  28. South Dakota Reduce School Lands Purchase Interest (1914)
  29. South Dakota Reinvestment of School Funds, Amendment D (1968)
  30. South Dakota School District Debt Limit (1954)
  31. South Dakota School District Indebtedness (1950)
  32. South Dakota School Funds Investment, Amendment B (1978)
  33. South Dakota State Cement Enterprise Sales Trust Fund, Amendment L (2010)
  34. South Dakota State Cement Plant Sale Trust Fund, Amendment A (April 2001)
  35. South Dakota State Coal Supplying and Roads Funding (1916)
  36. South Dakota State Debt Limit, Amendment B (1968)
  37. South Dakota State Debt Limit (1890)
  38. South Dakota State Revenue and Finance Structure (1916)

Recent news

This section displays the most recent stories in a Google news search for the terms "South Dakota budget."

Some of the stories below may not be relevant to this page due to the nature of Google's news search engine.

South Dakota state budget and finances - Google News Feed

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Contact information

South Dakota Bureau of Finance and Management
500 East Capitol Avenue
Pierre, South Dakota 57501
Telephone: 605-773-3411

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  12. South Dakota Retirement System, "2012 CAFR," accessed November 20, 2013
  13. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  14. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  16. 16.0 16.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  17. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  18. 18.0 18.1 18.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  19. 19.0 19.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014