Contra Daugaard, legislators set optimistic budget projections
This morning, the Joint Appropriations Committee voted unanimously to adopt new revenue projections that are somewhat more confident than those put forward either by Gov. Dennis Daugaard or the Legislature's own fiscal staff.
Combining the current year's and next year's budget, lawmakers expect South Dakota to have an extra $3.3 million more than the Legislative Research Council predicted. And they expect a whopping $7 million more than Daugaard had predicted.
These numbers didn't come out of thin air. After LRC and the state Bureau of Finance and Management each issued their revenue projections yesterday morning, lawmakers went through and in almost every case picked the higher number of the two for every revenue source.
For example, BFM predicted $848 million from the sales tax in 2015, while LRC predicted $851 million. Lawmakers went with $851 million. But for the property tax reduction fund, BFM predicted $107 million to LRC's $105 million; lawmakers adopted $107 million as their total.
Daugaard's budget chief, Jason Dilges, wasn't too happy with this burst of optimism from the appropriators.
“It looks like to me there’s ... a desire to try and have the revenue estimates be higher and spend money,” he said Monday evening.
Dilges also complained that "none of the legislators have been forthcoming with me" about some of their spending plans.
Under the first three years of Daugaard's term, lawmakers largely went along with the governor's stated goal of very conservative budget projections. That seems to be shifting a little this year.
Now, a $7 million difference in a $1.4 billion budget is not terribly much. And recent years have often seen budget surpluses in the tens of millions of dollars. Rep. Mark Mickelson, R-Sioux Falls, cited that history in his defense of why he considers this more optimistic projection to be "pretty conservative."
"IÂ will be shocked if we come back next year and we don't have more revenue than we forecast," Mickelson said.
Still, lawmakers largely cited anecdotal data (large amounts of construction in their home towns, today's prices on the ag commodity market) and gut feelings Tuesday morning when defending their optimistic revenue projections.
"Traditionally, I've been known as very, very conservative," said Sen. Bill Van Gerpen, R-Tyndall. "But I feel very good about the subcommittee's recommendation numbers. Sales tax I think is going to see an increase this year."
This new assertiveness comes in a year when Sen. Deb Peters, R-Hartford, is running the appropriations process. Peters has a more forceful personality than last year's Joint Appropriations chair Fred Romkema. Under Romkema, lawmakers largely stuck within the confines of Daugaard's proposed budget, spending money he had left for them to allocate but not changing anything significant other than cutting an employee wellness incentive program.
It remains to be seen how things will shape up over the coming days, but don't be surprised if lawmakers are more willing than the past to defy Daugaard and tinker with his budget.
