PIERRE, S.D. — South Dakota officials boasted of a potentially record-breaking surplus in a Monday, July 19, news release.
The state budget closed with over $85 million more in revenues than budget officials had previously forecast, leading a news release from Gov. Kristi Noem's office to claim "historic growth" that was the largest "quite possibly in state history."
"Because of our respect for freedom and our continued emphasis on fiscal responsibility, South Dakota's financial house is in order and positioned to ensure a safer, stronger, and healthier South Dakota for the next generation," read a statement attributed to Noem.
South Dakota is not alone in seeing a budget surplus, though, and far from the only state to attribute state policies for its relative revenue bounty.
In fact, some economists say, federal spending by Congress to stave off insolvency during the COVID-19 pandemic — both in 2020 and in 2021 — has kept many states afloat.
Earlier this year, following President Joe Biden's signature on the American Rescue Plan, for example, a legislative committee announced South Dakota was set to see $3 billion in funding come from Washington, D.C., to Pierre.
Last month, Minnesota announced a $1.8 billion surplus. And in May, California's Gov. Gavin Newsom touted a whopping $85 billion surplus. Democratic governors of both of those states imposed stricter public health measures upon businesses and communities during the pandemic than did Republican Noem.
Spending in Pierre this past legislative cycle focused on infrastructure and facilities, but next year may look toward state salaries. Recently, state officials in Pierre have drawn scrutiny thanks to low public employee pay.
This spring, the state landed back at the bottom of the nation in teacher pay. And last week, based on an anonymous report from a correction staffer lamenting bottom-of-the-region pay, among other issues, Noem fired two top wardens and put her Department of Corrections Secretary on administrative leave.
State law requires the surplus to go into the general reserve fund, currently at over $300 million. A state release says this accounts for more than 16% of next year's general fund budget.