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Gov. Proposes Budget To SD Legislature

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The state’s financial situation has improved, but Gov. Dennis Daugaard has proposed a fiscally conservative budget to legislators. He says he’s worried about many unknowns, including the still unsettled battle over the so-called “fiscal cliff” in Congress.

Daugaard’s proposing growth in key areas, and suggests spending some money that doesn’t come in continually to the state. Still, he says he’s holding back, and wants legislators to do the same when they finalize the spending plan for Fiscal Year '14.

Daugaard anticipates an additional $95 million in revenue for FY14, which is why he's planning for modest growth with 3 percent funding increases to all types of education, Medicaid providers, and cost-of-living adjustments for state employees.

Daugaard also suggests spending some one-time money, within reason.

“We should defray a liability, we should build something, we should improve the stability or secure something that that we have already built, or we should endow something,” said Daugaard during the address.

Still, as the battle in Congress over how to stop both the spending cuts and tax increases that are set to go into effect Jan. 2 wages on, Daugaard remains cautious.

“I think we should wait and see what happens on those two fronts," said Daugaard. "Both have deadlines.”

That’s an approach many in Daugaard’s party advocate.  

"I’ve got some real concerns about what’s going on or what’s not going on in Washington D.C. and how that’s going to impact our state budget,” said Sen. Mark Johnston (R-Sioux Falls).

”I honestly don’t know if the federal government’s going to solve that problem by March 8, when we’re done,” explained Sen. Shantel Krebs (R-Renner).
Democrats in the Legislature have a different approach to spending the state’s revenue. They want to see more funding for schools and an expansion of the state’s Medicaid program.

”It’s frustrating to me to see taxpayer dollars not being spent on taxpayer needs,” said Rep. Peggy Gibson (D-Huron).

”Every year there’s something, and obviously we have to be aware of all those external circumstances, but, I mean, you can’t be Chicken Little, you can’t just never do anything," said Rep. Bernie Hunhoff (D-Yankton). "You’ve got to invest for the future."

With months to go before the budget is finalized, nothing proposed Tuesday in Pierre is set in stone.

Daugaard says he anticipates an extra $29 million in revenue for the current fiscal year, FY13. He proposes spending some of that money on shortfalls in the state’s health care system, economic development commitments, and starting up the state's Criminal Justice Initiative, a plan to help reduce prison populations by expanding drug courts and access to behavioral help.
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