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Congressional Extension Puts SD In Tough Spot

January 3, 2013, 5:32 AM by Austin Hoffman

Congressional Extension Puts SD In Tough Spot

Congress may have retroactively kept the government from going over the fiscal cliff, but that doesn't mean we're out of the woods.

They left the table without voting on billions of dollars in possible spending cuts and now South Dakota lawmakers are wondering how to put together our state's budget.

Right around 45 percent of South Dakota's budget comes from the federal government. The legislative session begins next week.  And without any real answers on how much money to expect from the federal government, decisions on the budget could be tricky.

"This could have some major impacts on the state of South Dakota," Republican Senator Deb Peters said.

Peters says without any real numbers from the federal government going into session, it could be very difficult to set money aside for specific programs.

"Don't bank on the federal money. If you've got a bill that relies on federal dollars, we could pass it and we can have the governor sign it.  But in the end, if that money never shows up it doesn't get spent," Peters said.

"If you can't project your revenues, you can't project your spending obviously. And that's the issue we're going to be facing a good share of our, as I said, about half of the budget comes from the federal government directly. So if we don't know what the revenues are going to be, it's awfully hard to put together a budget," House Democratic Minority Leader Bernie Hunhoff of Yankton said.

Hunhoff says Medicaid takes one of the largest pieces of the federal money and could be hurt severely. And he says it's not only direct budget cuts that they have to take into account; there could be other cuts that hurt state revenue.

"I mean whether they cut back farm programs or possibly even Social Security, Medicare, Ellsworth Air Force Base, education funding, all those other programs which could have an impact on the overall state economy, that could hurt our state revenues even aside from the federal revenues," Hunhoff said.

"It really raises a lot of uncertainty obviously. It's going to lend itself to a lot more dynamic discussions as far as, well, 'What are you going to do if the Federal money doesn't come? If we give you the federal spending authority and it doesn't come, what is plan B?'" Peters said.

South Dakota's legislative session begins Tuesday, January 8 at noon and ends Friday, March 8. It's the first session in the country to wrap up so there is a good chance that Congress won't have voted on any possible cuts yet.

The legislature may have to wait until they return at the end of March for veto day to pass a budget or possibly have a special session.

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