Candidate Budget Basics Let 's talk budget process!

SD Budget & Policy Institute Mission - to promote responsible and equitable fiscal policy through research and education Nonpartisan, not-for-profit 501(c)3 [not a state government function] Funding from Northwest Area Foundation and donations from people and businesses in South Dakota Board of Directors Robert Burns, PresidentDeb Fisher-ClemensKay Jorgenson Dave Volk, Vice PresidentEileen BriggsPaul Dennert Gene Lebrun, Sec/TreasurerRob OliverJim Fry Rich Garry, Past PresidentMary Bibby

Are you fluent in budget basics? You might say the state budget is the ultimate policy document…

How SD BPI talks about fiscal policy

…. a guide to understanding the components of the state budget, how it is created, and the priorities and choices it reflects. download free from sdBPI.org

In a balanced budget: expenses = revenues

Increase revenue? decrease expenditures? combination of both? Balancing the Budget

Page 6, SD Budget Primer A budget is born

Page 6, SD Budget Primer

part-time legislature short Legislative session General bill amendments introduced last day or two of session Revenue estimate delayed until March Challenges in our budget process

Governor’s budget address and proposed budget are available at bfm.sd.govbfm.sd.gov Budget in Brief includes a tax expenditure report LRC briefings on agency budget requests and other documentation available at legis.sd.us legis.sd.us Revenue estimates for upcoming year Fiscal notes on legislation Fiscal tools that inform SD budget decisions

BFM Website State Budget

BFM Website Governor’s budget and supporting documents

LRC Website legis.sd.gov

LRC Website budget documents

LRC Website Hearing Schedule and Materials _Materials/default.aspx

LRC Website Materials from Dept. of Education hearing

LRC Website Revenue Estimate

LRC Website Amendment Packet

Fiscal tools used by other states that could help inform South Dakota budget decisions Current services budget Revenue review Tax incidence analysis

Current services budget

Revenue review

Projecting structural deficits and surpluses

Tax incidence analysis

Increase revenue? decrease expenditures? combination of both? Balancing the Budget

Revenue What are the main state and local revenue sources?

Revenue Who do the $ come from? South Dakota - a low tax state not a low income state

Taxes as share of income Source:

TAXES The fundamental purpose of taxation is to raise the money needed to fund public services

Expenditures Where does the money go?

SPENDING: 1. General Funds 2. Federal Funds 3. Other Funds

General Fund expenditures

Will there be an increase or decrease in provider reimbursements in the upcoming fiscal year?

FMAP fluctuates based on state per capita income (wealthier states get less federal assistance!) 50% Floor

EXAMPLE OF SOCIAL SERVICES BUDGET RECOMMENDATION Governor’s FY15 Budget

K-12 Education Funding Concepts to understand: 1. School Funding Formula 2. Per Student Allocation (PSA)

How SD funds k-12 education Source of funds to support SD k-12 education Federal State Local

Total per student funding & funding sources for SD school districts FY11 (in thousands)

School Funding Formula page 19 of Budget Primer

Cumulative per student allocations compared to CPI-W (inflation)

Thank-you for your willingness to serve your fellow citizens as a state legislator