South Dakota legislators were over-optimistic on revision to sales-and-use tax revenue

Capitol News Bureau
cash money dollars

PIERRE, S.D. (KELO) – For better or worse, state government in South Dakota depends heavily on sales-and-use tax revenue, as the final numbers showed this week for the 2019 state fiscal year that ended June 30.

For perspective, turn the calendar back to one year ago.

The total sales-and-use tax revenue that state government received was $988,823,603 for the fiscal year that ended June 30, 2018.

The Legislature in the 2018 session initially set the 2019 estimate at $1,029,090,230.

This year, during the 2019 session, lawmakers revised the 2019 estimate upward to $1,035,338,915.

The revision has become a yearly event during legislative sessions in recent decades.

The Legislative Research Council wanted to go higher yet with its suggested revision to $1,037,885,891. The governor’s Bureau of Finance and Management proposed a revision to $1,034,146,495. Legislators settled between the two.

Unfortunately, the decision came at the same time that South Dakota’s sales-and-use tax revenue lost ground in February 2019. Collections that month dropped 3.3 percent from the similar month one year earlier.

The total through the June 30 end for the 2019 fiscal year finished at $1,025,401,209.

That was about $9.9 million less than the revised estimate and about $3.7 million less than the original 2019 estimate.

The Legislature set the fiscal 2020 estimate for sales and use tax at $1,075,218,900.

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