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Governor Proposes Minimum 10 Percent Cuts

January 19, 2011, 4:48 PM by Shawn Neisteadt

Governor Proposes Minimum 10 Percent Cuts
PIERRE, SD - South Dakota has a $127 million budget shortfall, and every department at every level of state government is preparing for cuts.

Governor Dennis Daugaard unveiled his proposed budget Wednesday in Pierre.

Governor Daugaard made it clear to state lawmakers that we're still feeling the pain of the nationwide recession here in South Dakota. While he admits there are areas of improvement, he also says its time to stop delaying the inevitable, and lawmakers must decide to cut at least ten percent of funding from all levels of government.

Governor Daugaard didn't waste time in his budget proposal. He got to the point.

"As I crafted my budget, my goal was the eliminate the structural deficit this year. And we're going to have to be making some tough choices for that to occur," Governor Daugaard said.

Governor Daugaard says lawmakers must find $127 million in funding to cut, a minimum of 10 percent from each level of government.

"We've had a couple of years of declining revenue, not slow down in growth, declining revenue. And we've had at the same time, increasing medical and education expenditures," Governor Daugaard said.

Those areas aren't excluded in the Governor's proposed cuts. Daugaard wants a ten percent cut for all education in the state. He is also calling for a reduction in property taxes. That money goes to local schools, but he says if districts can't handle the reduction, they'll have to pass an opt out.

"If schools can make their case that they would rather increase property taxes or maintain them, than streamline their operations like state government is doing, they have that option," Governor Daugaard said.

In the past, lawmakers have used federal stimulus dollars and state reserve money to help balance the budget. Daugaard says the stimulus money is gone, and tapping into reserves is not a long-term answer.

"It’s not enough to go just part way, if we do we'll be back here again next year talking about more cuts, and we will have squandered most, if not all, of our reserves," Governor Daugaard said.

And that's why the governor says this legislature must make tough decisions, and change the course of state spending.

Before leaving office, Governor Mike Rounds presented a proposed budget. Governor Daugaard made several references to that previous proposal, but says it is not practical because it would have left the state with a budget gap of nearly $75 million dollars.

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