Federal sequestration will have an impact on South Dakota but state leaders believe the affects will be manageable and no major changes will have to be made in state government – for now.
In the next four months Senator Deb Peters, the co-chair of the legislature's Joint Appropriations Committee, says sequestration will only have a $2 million impact on state agencies.
Governor Dennis Daugaard says the state can get by if the sequestration cuts don't last long.
"In the near-term we believe the human impact is manageable and modest," Daugaard said.
Peters says the impact on state agencies isn't going to be as bad at first thought but they are still trying to figure out where else the cuts will be felt in the state.
"We just have a lot of unknowns right now trying to scour through all the grants we know about and that we're aware it does impact," Peters said.
State analysts say the uncertainty in Washington is putting a damper on South Dakota's economic outlook for the next year. Job and income growth are expected to be below average.
"So, that's holding back a lot of the decisions by our businesses and that's one of the reasons why below average growth is expected in the economy right now," Jim Terwilliger with the South Dakota Bureau of Finance and Management said.
And if the affects of sequestration last into this summer, Daugaard says the state may have amend the state budget, but as for right now he's not anticipating any major changes until this summer.
"We believe we're going to be managing through this without an amendment to the FY13 budget," Daugaard said of the budget year that ends June 30.
A special session of the legislature may be needed to adjust the budget if the sequestration cuts last into the summer.