The state of South Dakota closed its budget year (June 30) with a surplus, a remarkable event considering the nation's economic decline due to the coronavirus pandemic.
Total revenues for the state was roughly $8 million lower than expected, but expenditures also came in below budget, providing a $19 million surplus.
While these numbers seem large to us as individual citizens, they are relatively small for the state as a whole. The budget surplus is about one-half of 1% of the total budget.
That in itself is extraordinary. Considering all the factors that go into a budget, ranging from economic forecasts to an unexpected pandemic, we're only one-half of 1% off? That is remarkable.
Even more remarkable may be the financial condition of the state as we work to come out of the pandemic. We recognize there are many challenges for the state, nation and world until an effective vaccine is found, but South Dakota is actually in a good position.
Depending on how it's measured, South Dakota's economy has contracted less than most state's economies. The state still has coronavirus relief funds that can be used. Some of the $1.2 billion appropriated by the federal government has been sent to cities and counties, and other money has been used to prop up the state's unemployment compensation trust fund. The rest of the funds are being held to wait for clarification on what they can be used for. And the state has $194 million in reserves that could be partially tapped.
The financial challenges of the pandemic aren't yet over. But we believe South Dakota has a chance to come out of the recession in pretty decent condition.
-- Jon M. Hunter