Article Body
Office of the Governor
For Immediate Release; Thursday, November 29, 2001
For More Information: Bob Mercer or Mike Mueller, 773-3212
Janklow Budget Calls For Smaller Government And No Tax Increases, While Protecting Education, Medical Needy And Tax Relief
(Pierre) – Gov. Bill Janklow proposed a budget for South Dakota state government that meets the priorities of South Dakota taxpayers and the growing needs of education and health care, during an economic recession that is slowing down tax revenue flowing into the state treasury.
Janklow said South Dakotans have been through tough times before and know how to deal with the challenge. "It's just a matter of being sensible," he said.
The state fiscal year 2003 budget (July 1, 2002 - June 30, 2003) that Janklow outlined to the South Dakota Legislature on Thursday, Nov. 29, calls for no tax increases despite the economic slowdown. Janklow's plan calls for cutting 61 jobs from state agencies under his control and using $11 million this year and $36 million next year from the state's $121.6 million of budget reserves, built through past years of workforce reductions and conservative spending.
Beside offsetting the problem of tax revenues growing slower than normal, the reserve funds would cover the loss of the inheritance tax repealed by voters in the 2000 election. The inheritance tax produced $31 million last year and $25.6 million the previous year.
While addressing the inheritance tax repeal, the proposed budget also keeps in place full funding for the $122 million of property-tax relief for homeowners and agriculture. The property-tax relief program reduces taxes levied for public schools.
Overall, the proposed budget calls for $879 million of spending from the state's general fund. That is a $28 million increase. More than $19 million of the increase is for the state's share of federal health-care assistance such as Medicaid. About 84,500 needy children and elderly are enrolled in Medicaid and related federal medical programs in South Dakota, approximately one of every nine citizens in the state.
One new program is a two-pronged effort to educate more registered nurses at South Dakota State University at Brookings and through community education overseen by the University of South Dakota in Rapid City, Sioux Falls, Pierre and Watertown. The goal is to produce 400 to 500 additional registered nurses during the next five years. To fund it, Janklow is proposing that the Legislature tap a special health-care trust fund approved by voters earlier this year. Taking money from the trust requires a three-fourths majority vote by each chamber of the Legislature.
"One of our crying needs is registered nurses," Janklow said. The shortage of nurses is widespread but especially so in many smaller communities. "It's where nurses aren't going that's the problem," he said.
Janklow also proposes giving the maximum 3 percent increase per student for state aid to K-12 education. That is an increase of at least $113 and up to $136 per student, depending on the size of the school district where the student attends.
Smaller schools receive more aid per student under South Dakota's system. The 55 districts with enrollments of 200 and under would get $4,667 per student. The 79 districts with 201 to 600 students would get an amount between $4,667 and $3,889, based on size. The remaining 42 districts with more than 600 students apiece would get $3,889 per student.
Because total K-12 enrollment continues to decline in South Dakota, the schools as a whole face the possibility of losing about $4.5 million of state aid under the system of paying per student. But Janklow is proposing that the $4.5 million continue to go to the schools through increased funding for special education and for school technology.
That would mean the schools continue to receive the entire $271 million, despite the decreasing enrollment that is forecast to fall to 130,077. Overall, total state funding to K-12 schools for all programs would stay constant at $313.7 million.
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Listen to the address (1:19:39)
Read the news release about the Governor’s budget.
See the slides used in his address. See the slides in Acrobat (.pdf) format.