PIERRE, S.D. (KELO) — State government in South Dakota closed its budget year June 30 with a record-setting surplus of $115.5 million in its general fund.
State law required the money transfer to state government’s reserve funds. The reserves now total $422.6 million, or 20.5% of the fiscal year 2023 general fund budget that began July 1.
State government operates on a July-through-June budget year. The 2023 general fund summary calls for $2,066,144,668 of revenue and $2,061,336,475 of expenditures. The Legislature for 2023 also appropriated $2,266,142,632 of federal funds and $1,526,864,771 of other funds such as motor-fuel taxes.
According to a news release from the governor’s office, total general fund revenue for fiscal year 2022 finished $72.3 million above the Legislature’s adopted estimate, while spending from the general fund was $43.2 million less than budgeted.
State government reported a surplus of $85.9 million one year ago. The total reflected $62 million more in revenue than expected as well as spending that was $23.9 million below budget.
The two previous years saw surpluses of $19.1 million and $19.4 million. All of that came from savings, as general revenues came in below forecasts by $7.9 million and $4.4 million.
Governor Kristi Noem issued a statement Monday praising the latest numbers.
“South Dakota has the strongest economy in America and a strong financial position to match,” Noem said. “We live within our means and operate government conservatively. Low regulation, low tax burden and business friendly policies are still the recipe for economic success.”
South Dakota led the nation with the highest first-quarter growth in personal income at 8.5% for calendar 2022, according to June estimates from the U.S. Bureau of Economic Analysis. Two neighboring states came in second and third, with North Dakota at 8.2% and Iowa 8.1%.
The governor’s news release noted that South Dakota’s 2022 surplus resulted from “unexpectedly higher” general-fund revenue.
South Dakota businesses, citizens, and state, tribal and local governments have been budgeted billions of dollars from the federal government in relief since the COVID-19 pandemic spread across the U.S. in 2020. That includes $2 billion distributed so far through state government.
According to the U.S. Small Business Administration, more than 64,000 applicants received federal Paycheck Protection Program loans / grants in South Dakota totaling more than $2.7 billion. The three largest were Empirical Foods of Dakota Dunes $9,158,800; Coca Cola Bottling Company High Country of Rapid City $9,116,300; and Dakota Provisions of Huron $8,962,400.
The IRS issued three rounds of economic impact payments in response to the pandemic and the South Dakota Department of Labor and Regulation provided additional re-employment assistance grants to people who lost jobs. South Dakota’s most recent unemployment rate was 2.3%.
Noem, who supported Republican former U.S. President Donald Trump, used the announcement of state government’s surplus to criticize U.S. President Joe Biden, a Democrat.
“We must remain cautious and conservative due to 40-year highs in inflation caused by the Biden Administration’s heavy spending and regulation,” she said. “However, we are prepared to weather any economic storm thanks to our structurally balanced budget, fully funded pension, and strong reserves.”
The COVID-aid packages passed by Congress that benefited South Dakota were signed into federal law by Trump and Biden.