Legislative Budget Basics

1. Legislative Budget Basics Finding budget solutions through our shared values

2. Mission: To promote responsible and equitable fiscal policies through research and education Joy Smolnisky, Director 808 N. West Ave., Sioux Falls, SD 605-367-9667 joys@sdbudgetandpolicyproject.org http://sdbpp.org Funded through a grant from the Northwest Area Foundation

3. Becoming fluent in budget basics You might say government budgets are the ultimate policy documents…

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

6. In a balanced budget: expenses = revenues

7. Balancing the Budget • increase revenue • decrease expenditures • combination of both

8. A budget is born Page 6, SD Budget Primer

9. Final budget

10. Challenges in our process • Part time citizen Legislature • Short legislative session • Final budget amendments are often not introduced until the last days of session

11. Information to support decision-making • Governor’s budget and budget address http://bfm.sd.gov/budget/rec12/index.htm • Fiscal notes on legislation • Revenue estimates for upcoming year • LRC briefings on agency budget requests and other documentation available at legis.state.sd.us

12. LRC Website: legis.state.sd.us

13. Office of Fiscal Analysis

14. Appropriations Notebook

15. Revenue Estimates

16. Revenue estimatesmethodology

17. Amendments to general appropriations bill

18. Appropriations Notebook agency information

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

20. Current services budget

22. Tax incidence analysis

23. Tax expenditure report $500 million. SD sales tax exemptions alone lower total state revenue by $500 million.

24. Getting Involved • Inform yourself and your community • Influence your legislators • Make a difference

25. Where do the $ come from? South Dakota - a low tax state not a low income state

26. South Dakota Per Capita Income

29. Dependency on consumption taxes is growing

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

31. Where does the money go?

32. SPENDING: 1. General funds2. Federal funds3. Other funds

33. General fund expenditures

34. South Dakota spends less per-capita than other regional states

35. Two expenditure examples: • K-12 Education • Medicaid

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

37. School Funding Formulapage 19 of Budget Primer

38. SD State Aid to K-12 Education

39. Think of SD as one big school district… • Total Students X PSA = $ for education • 53% comes from state general fund (includes video lottery $) • 47% comes from local property tax • (set mil levy by dividing statewide property wealth by 47% of dollars needed)

40. How big is your districts Funding Formula Cup?(# students times PSA) small large medium

41. How much local property wealth do you have?(assessed value times mil levy) Property-wealth average district Property-wealth poor district Property-wealth rich district

42. How much will the state provide?(enough to fill your “cup”) Property-wealth average district Property-wealth poor district Property-wealth rich district

44. K-12 % of state general fund dropped by 25%

45. K-12 general fund spending as % of total personal income dropped by 25%

46. SDMedicaid enrollment changes

47. The vast majority of South Dakotans on Medicaid are low income children Average cost per Medicaid enrollee varies significantly between children, adults, elderly and disabled

48. SD share of Medicaid costs