Published Online: November 18, 2008

S.D. State Budget Bleak

Gov. Mike Rounds says next year will bring the "worst budget scenario that we have seen," and he doubts there will be much of an increase in state funding of schools.

The governor will present his new budget proposal to the Legislature in a speech on Dec. 2.

Rounds says the current economic downturn means the state budget will be especially tight next year.

He says half of the state budget goes to education each year, and spending on schools will have to be flexible, along with everything else.

School funding has been a touchy issue in recent years between lawmakers and the governor, who has warned that education funding might dip below the maximum-allowed increase of 3 percent or the rate of inflation.

Dave Knudson of Sioux Falls, the Senate Republican leader, said he plans to introduce a bill to increase state aid to 4 percent or the annual rate of inflation, whichever is greater.

Knudson said that under his plan, state aid to schools couldn't go up by more than the percentage increase that the state's general fund revenue sees in a given year. He said that means the state would not be held to something it couldn't afford.

Four percent sounds good but isn't realistic, Rounds said.

"I don't know where they would ever get the money for 4 percent," he said. "It would have to have a revenue source someplace."

Raising taxes takes two-thirds support in the Legislature, and Rounds said that's unlikely.

Democratic state Rep. Bill Thompson of Sioux Falls, who is on the House education committee, said education is an investment.

"In the House, there are too many people who see education as an expense, and that's the basic philosophical difference," he said.

It would make no sense for Rounds to cut education even if the budget is tight, according to Thompson, a retired teacher.

"My question to the governor would be, 'Is education your No. 1 priority?' It should be, in terms of economic development and in terms of how much of the state budget that goes toward education," he said. "Education is not frosting; it's absolutely crucial and should be the last area for where we look in terms of cuts."

Half of the state's budget goes to education, and spending on schools will have to be flexible, along with everything else, Rounds told the Rapid City Journal.

"Everyone is going to have to do with less," he said.

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