Last updated on 2015.01.21
Senate Bill 55 is this year's revision of the current budget. As they do each year, legislators will use SB 55 to amend the current budget to reflect changes in revenues and expenses that have since accrued since legislators guessed ten months ago how much it would cost to run the state.
Legislators didn't guess too badly last year. Out of general fund expenditures of $1.392 billion approved last March, Senate Bill 55 cuts just $9.4 million, or 0.67%. Guess your household budget to within 1%, and you're doing pretty well.
Downward revisions in education make up the bulk of the general fund savings. The vo-techs saw 225 fewer students enroll than the budget anticipated, resulting in $749,054 less expense than budgeted. K-12 fall enrollment was 354 students lower than budget, resulting in $1.69 million less in state aid. But the big difference is $6.61 million more in local revenue than the state budget expected. Add in a few other details, keep a little cushion for other unpredictables, and SB 55 takes $7.4 million out of education column of the state general fund.
The Bureau of Finance and Management told the Joint Appropriations Committee last week that revenues came in $10.7 million lower than expected for this fiscal year. However, by cashing out a $16 million Medicaid reserve fund and the ACA-obsoleted risk pool of $2.4 million, plus other adjustments, the FY2015 budget still comes out ahead $14.4 million. In other words, even if all the kids we expected had enrolled in the vo-techs and the public schools, and even if the locals hadn't overperformed on generating school revenue, we'd have still had plenty of money to cover our costs for this fiscal year.
Governor Dennis Daugaard once said he was "committed to the principle of 'first dollar and last dollar' for funding our schools." Well, here we have 14.4 million last dollars. Are we spending them on education?
The dual-credit program, which lets high school kids take college classes for credit toward graduation and toward their college transcripts for cheap is getting $577,500, to pay for many more students wisely participating (taking 5,500 more dual-credit courses than anticipated—good job, kids!). SB 55 sprinkles about $160K around the various campuses, plus 20 new full-time job units at USD. But the big one-time dollars we have at the end of this fiscal year are being directed elsewhere (per page 30 of BFM's January 14 presentation:
| Emergency and Disaster Fund (SB 39) | $7,994,449 |
| Provider Direct Care Workforce Funding | $4,125,000 |
| Captive Insurance for Property and Casualty | $4,000,000 |
| Captive Insurance for Authorities | $2,000,000 |
| Sanford Underground Lab Ross Shaft Upgrades | $3,950,000 |
| SD Conservation Fund for Wildlife Habitat | $1,500,000 |
| Jobs For America’s Graduates Start-up Funding | $925,000 |
| River Flow Study | $500,000 |
| Tax Refunds for Elderly and Disabled | $450,000 |
| Rural Healthcare Recruitment Assistance (HB 1060) | $381,766 |
| Rural Healthcare Facility Recruitment Assistance (HB1057) | $302,500 |
| Total FY2015 Emergency Special Appropriations | $26,128,715 |
Cleaning up disasters, recruiting health care workers, insuring state buildings, studying the Sioux River, giving old folks and the disabled a little tax break—all decent things to do... but none of them directing "last dollars" to improve our public schools.
Senate Bill 55 goes first to Senate Appropriations, which has yet to fix a date for that discussion. Perhaps amidst the recitation of dollar figures, we'll hear one of two legislators ask why we don't see more neat new ideas to boost our schools with those last dollars.
Cory,
One of the first principles of good budgeting is to create no incentives for inaccurate budgeting/forecasting. The fight for allocation of dollars belongs in context of all needs during the budgeting process for the next year. If the education numbers were off, would you support that they come out of next year's education dollars? I hope not because that creates a different incentive for bad budgeting (actually manipulating forecasts).
This is just government doing their job. Its not partisan and I'd expect the same thing with a Dem Governor. To tie this re-allocation to "last dollars" can cut the other way in future years. I wouldn't go there if I were you if for no other reason than volatility for education outside anyone's control.
A Democratic governor who leads:
http://www.flatheadnewsgroup.com/hungryhorsenews/bullock-s-budget-provides-for-education-and-medicaid/article_8ae054fa-703a-11e4-b023-9f3c16599238.html
Remind us, Troy: how many Fortune 500 companies are based in South Dakota?
What is this money being pounded down our old friend Mr. Gibilisco's giant hole all about? That is 4 billion dollars we could be using to pay good teachers and fix roads.
Lar, doesn't Mr. Stan A own one of those?
Not to mention such a close number also includes luck.
Tim Giago is reveling in his accomplishments today, as well he should.
Mr. H, in thinking about your blogging more, if we had plenty of money to cover everything education needed plus had all this extra, doesn't that mean we could cut some money from education next year and don't have to add to the balloon payment as much as the fat-cat administrators want?
Also, if we do add to the squishy water balloon of money for schools more than what we already plan to I bet you a donut soaked in gravy that somebody does a 1.2.3.4 thing and makes the money go only to good teachers and keeps it out of the grubbing maw of the fat-cat administrators with their expensive cars in reserved parking spaces. You can mark my words but I'm just sayin...
So, the governor doesn't practice what he preaches, what else is new?
That big item for health care workers, I don't think they want to recruit them. I think they want to give bonuses to the good ones, like 1.2.3.4 would have done for teachers. This is taking money from what would have gone to the 1.2.3.4 bill and giving it to these medical people!
DO nothing like photo op Thune, hey wait let me comb my hair.
that good democratic montanan governor-he is all over the 2nd yellowstone river pipeline rupture. 70,000 gallons travelled 85 miles downstream in 2011, $3.4 million fine, $135 million in cleanup.
where hasn't there been an oil spill from a pipeline rupture?
the gulf, alaska, the rivers are like a ladder draining the plains west to east. KXL will cross every one of 'em.
well at least SD republicans have got it covered here. the taxpayers will clean it up, right?
oh, troy, any CPA wanna comment on incentivizing manipulation of accuracy of budget forecasts? professional integrity usually solves this...unless the legislature manipulates the depth of data and scope of the audit committee's investigation (EB5).
How much in budget reserve when that rainy day comes.No wait I balance my budget, with the feds help but I AM STILL FISCAL.
Troy, I see what you're saying about not wanting to incentivize bad budgeting. If I knew any surplus at the end of the year was guaranteed to go to K-12 education, I might well be tempted to manipulate forecasts and pad every department's budget with a few million that I knew would revert to K-12 the following calendar year. I do prefer to tax only to the extent necessary and budget honestly up front.
But Daugaard is the one who laid out the "first dollar last dollar principle." Are these not last dollars that, by Daugaard's promised principle, should go to education this year?
Grudz, on planning, I assume that the apparent $1.7M enrollment-based overestimate and the $6.6M extra from the locals that we didn't expect will figure into the calculations we make this year. But we could be wrong next year in the opposite direction and come up short on cash. When we know we're underfunding education to start with, it seems appealing to keep any unexpected extra money in the education pot. Use the same relatively accurate (easily within a third of a percentage point on fall enrollment) estimates to craft the FY2016 budget, and carry over that extra to budget a few dollars more into the FY2016 per-student allocation.
CH,
I get what you are saying but "surplus or deficit" generated by formulaic expenditures outside control of the budgeters like what you are referring in education would be outside the principle in my mind. An entity that applied it by including this strictly would be playing with fire. It would come into play with energy cost fluctuations as well.
And, even without potential forecast manipulation, in the case of education, it would cut both ways adding volatility to the effective formula year-to-year which would be problematic for school district planning.
While modern technology has made forecasting more science than every before (vs. by gut and by golly), the small deviance this year was also the result of good luck. Building into policy a dependence on good luck is a form of gambling.
Regarding, your comment to grudz, it goes to my comment of cutting both ways and volatility. How would you feel if the numbers went the other way and it was taken out next year?
So Troy, are you saying it's OK for the Governor to go against his word and promise?
Jana,
No. What is occurring is consistent with what he said, as I tried to explain. Let me take another run at it.
First, if the numbers had gone the other way, education would be cut. I don't want to see artificial gains or cuts to go to or for anyone because of missed projections. Nor, do I want to see incentives to enter into forecasting. As a minority party, you should be especially be opposed to opportunities for such.
Second, and to your question directly, the surplus or deficit as occurring here aren't the result of policy decisions or implementation decisions (savings generated through management) but application of formula. If more students had enrolled, we'd have funded above budget. Less students, we don't spend the money.
To do otherwise, growth in students above budget would decrease next year's per student allotment while decline in students would increase next year's per student allotment. Does that make any sense?
I think the point that gets overlooked is the basis on which it is said that education dollars were "overbudgeted." That is the flaw that no one wants to deal with. When you start out with garbage, you end up with rotting garbage and leachate. The first principle of good budgeting is to start with a defensible basis. The entire process is built on very little that is related to the education costs. It's all fiction.
How about using this as one time money to fix roads and bridges?