Gov. Rounds delivered his budget message yesterday. There were few surprises. He argued that economic slowdown necessitates some belt tightening by the state.
While revenue from general state taxes is expected to increase 6.4 percent this year, partly because of the effects of the voter-passed increase in the cigarette tax, revenue growth for the next budget year is projected at only 3.8 percent, Rounds said.
Higher fuel prices, rising interest rates on adjustable-rate mortgages and other factors mean South Dakotans have less money to spend on things that are subject to the sales tax, the state's main revenue source, the governor said.
''We're very concerned about what sales tax revenue will do now and in the future,'' he said in his budget speech.
The governor's proposed budget calls for spending a total of $3.55 billion in the next budget year, an increase of $159.2 million from this year.
The governor suggests making up for the revenue shortfall by reducing the increase in school spending and state employee salaries from 3% to 2.5%.
Here's the rundown on education funding. The governor continues to throw his support behind higher education.
Education dollars: Of the proposed $62.7 million in increased spending of state general tax funds, $35.9 million would be for education from pre-kindergarten through the university level.
For higher education, Rounds supports the Board of Regents' plan to issue up to $65 million in bonds to upgrade science and lab facilities at the six state universities. The state would provide $2.3 million a year, to be matched with money from the campuses, to pay off the bonds. Universities would get additional money for salary increases and a program that improves wireless Internet access for laptops on campuses.
Not surprisingly, some legislators were disappointed with the education budget numbers:
House Democratic leader Dale Hargens of Miller said he would push for a 3 percent increase for those areas Rounds targeted with 2.5 percent.
"The 2.5 isn't going to go over well," he said. "We can find the money."
Rep. Tim Rave, R-Baltic said, "It wouldn't surprise me if the Legislature added some to education."
Be prepared for some last minute dealing at the end of February.
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