SB 133 Kicks Budget Deficit One Month Down the Road

Last updated on 2011.03.01

Maybe Governor Dennis Daugaard doesn't quite own the Legislature as I suggested Monday. One possible counterexample: Senate Bill 133.

Governor Daugaard has insisted that we fix South Dakota's structural deficit this year, in one shot, with no one-time money. But Senator Cooper Garnos (R-21/Presho) has concocted just such a one-time fix. He moved the amendment that turned SB 133 into an accounting trick. The bill would move the date the state disburses funds to the public K-12 schools back one day, from the end of each month to the beginning of the next. That means the twelfth payment of Fiscal Year 2012, currently due June 30, 2012, would become the first payment of Fiscal Year 2013, due on July 1, 2012, thus magically shifting $26 million from this year's budget to next year's budget. Poof! $26 million disappears from this year's budget.

What a coincidence: $26 million is roughly the same amount of stimulus dollars Uncle Sam sent us to use for education but which Governor M. Michael Rounds shunted to other purposes, a shell game Governor Daugaard seems disinclined to end.

Speaking of shell games, we've seen this calendar-shift shell game in education before. The Board of Regents used proposed using* exactly this scheme a couple years ago to "save" $10.9 million in payroll. Our man Hunter referred to this one-time scheme as an "absurd deception," perhaps the strongest language I've ever heard our local publisher use. Then-Rep. Russell Olson said he was leery of such budget tricks, since such one-time funding often comes back to bite you. (Sure enough, Russell Olson was one of the nine Nays in Wednesday's Senate vote on SB 133.)

Schools and education groups like this idea, but the executive branch does not:

"It's a one-time accounting maneuver. Even while it makes everybody whole on the cash side, it doesn't solve our structural deficit," said Colin Keeler with the Bureau of Finance and Management. "It's a great idea, but it just doesn't work when you dig into it" [Josh Verges, "Juggling Dates May Free up to $25M for Schools," that Sioux Falls paper, 2011.02.22].

I want to protect the K-12 system from a 10% cut in state aid. Using an accounting trick to move 8.3% of that aid off the FY2012 budget could save out skins. In combination with some more wheeling and dealing on the per-student allocation (come on guys: put it back!), this accounting trick could prevent any cuts to an already strapped public school system.

But it's still a trick. It's still not sustainable. It's still not a responsible investment in our schools. And it's a bad example for our kids (don't make hard choices; just look for loopholes!).

As was the case with the summer sales tax, the SB 133 one-time budget trick doesn't stink as bad as Governor Daugaard's cuts. But I get the feeling Governor Daugaard won't stand for tricks. Senate and House whips, start counting heads for a veto-overturn vote.