RAPID CITY, S.D. (KOTA) - The lack of predictability of the coronavirus pandemic has the state of South Dakota preparing for shortfalls.
Recently, Gov. Kristi Noem reported at the end of the 2020 budget year the state had a $19 million surplus. However, tax revenue is down in the midst of the pandemic and experts are anticipating budget shortfalls that could be between $16 and $40 million.
Liza Clark, South Dakota’s chief financial officer, says The state government is preparing for a continued drop off in sales tax revenue. She explains this is because when people don’t go out, they don’t stimulate local economy.
“Our concern is that this will trickle on longer as businesses struggle or as people are afraid to go out,” Clark said. “As things continue to develop were hoping that our revenues maintain what they have but we also know going into the future that their sales tax could continue to take a hit.”
Despite that hit, South Dakota’s budget has been bolstered by relief from the federal government through the CARES Act. That money is meant to allocated in a way that addresses the pandemic. The governor’s office has used $4.5 million to pay salaries and benefits in the Department of Public Safety.
Clark explained the relief money was able to go to public health and public safety officials because their work is considered essential during the pandemic.
“The treasury told us that public health and public safety officials are deemed substantially dedicated to the COVID response, so we know some of those salaries are eligible,” Clark said. “We also have looked at different technology needs security needs, that we need throughout the state agencies, and we’ve looked at some of those expenditures as well.”
The state is currently working to get relief funds dispersed. any relief funds not used by the state are meant to be returned to the federal government.
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July 29, 2020 at 12:46AM
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South Dakota prepares for continued drop in sales tax revenue - KOTA
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