State Revenue Outlook Worsens

Press Release

State Revenue Outlook Worsens

Gov. Mike Rounds said Friday that the most recent revenue outlook for state government has grown worse than earlier believed.

The governor will offer a new budget proposal to a joint session of the Legislature on Thursday, Jan. 22 at 1 p.m. CST.

"We will be recommending a revised budget, based upon updated projections for revenues for the remaining part of FY2009, which ends in June, and FY2010, which begins July 1 and runs until June 30, 2010," he said.

The governor said his new budget proposal will address the expected shortfalls without asking for higher taxes.

"I intend to offer legislators a revised budget in which they would not have to increase taxes," he said.

Prior to any changes in the proposed budget, the revenue shortfall for the remainder of this fiscal year could total $52.2 million, and the shortfall in the next fiscal year could be $81.6 million, the governor said.

It had earlier been estimated that there would be a $26.8 million shortfall this fiscal year and a $32.4 million revenue shortfall in FY2010.

The latest revenue projections are based on the most current economic forecasts for not only the United States but also the Upper Midwest, tailored specifically for South Dakota, Gov. Rounds said.

The recession is taking a toll across the nation, he said.

"It is as ugly as I have ever seen it in my life," Gov. Rounds said. "We can't fix it by just nibbling around the edges. We are currently in the process of significantly revising the budget."

The governor said it will be necessary to make major reductions in state expenditures in order to balance the budget.
"It's not a case of simply cutting bad programs, because we don't have bad programs in state government. Unfortunately, good programs in all departments will be impacted," he said.

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