legislative budget basics
DESCRIPTION
Legislative Budget Basics. Finding budget solutions through our shared values. Mission:. To promote responsible and equitable fiscal policies through research and education. Joy Smolnisky, Director 808 N. West Ave., Sioux Falls, SD - PowerPoint PPT PresentationTRANSCRIPT
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Finding budget solutions through our shared values
Legislative Budget Basics
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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 [email protected]://sdbpp.org
Funded through a grant from theNorthwest Area Foundation
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Becoming fluent in budget basics
You might say government budgets are the ultimate policy documents…
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• the components of the state budget,
• how it is created, and
• the priorities and choices it reflects.
download from sdbpp.org
…. a guide to understanding
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In a balanced budget:
expenses = revenues
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• increase revenue
• decrease expenditures
• combination of both
Balancing the Budget
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A budget is born
Page 6, SD Budget Primer
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Final budget
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Challenges in our process
Part time citizen Legislature
Short legislative session
Final budget amendments are often not introduced until the
last days of session
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Information to support decision-making
1. Governor’s budget and budget address http://bfm.sd.gov/budget/rec12/index.htm
2. Fiscal notes on legislation
3. Revenue estimates for upcoming year
4. LRC briefings on agency budget requests and other documentation available at legis.state.sd.us
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LRC Website: legis.state.sd.us
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Office of Fiscal Analysis
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Appropriations Notebook
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Revenue Estimates
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Revenue estimatesmethodology
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Amendments to general appropriations bill
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Appropriations Notebook agency information
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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
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Current services budget
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Tax incidence analysis
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Tax expenditure report
SD sales tax exemptions alone lower total state revenue by $500 million.
$500 million.
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Getting Involved
• Inform yourself and your community
• Influence your legislators
• Make a difference
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Where do the $ come from?
South Dakota - a low tax state not a low income state
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South Dakota Per Capita Income
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Dependency on consumption taxes is growing
60%
62%
64%
66%
68%
70%
72%
74%
76%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
% revenue from sales, use & contractor's excise taxes
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The fundamental purpose of taxation is to raise the money needed to fund public services
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Where does the money go?
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SPENDING: 1. General funds2. Federal funds3. Other funds
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General fund expenditures
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South Dakota spends less per-capita than other regional states
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Two expenditure examples:
• K-12 Education
• Medicaid
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K-12 Education Funding Concepts to understand:
1.School Funding Formula
2.Per Student Allocation (PSA)
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School Funding Formulapage 19 of Budget Primer
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SD State Aid to K-12 Education
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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)
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How big is your districts Funding Formula Cup?(# students times PSA)
small
largemedium
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How much local property wealth do you have?
(assessed value times mil levy)
Property-wealth rich district
Property-wealth poor district
Property-wealth average district
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How much will the state provide?(enough to fill your “cup”)
Property-wealth rich district
Property-wealth poor district
Property-wealth average district
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K-12 % of state general fund dropped by 25%
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K-12 general fund spending as % of total personal income
dropped by 25%
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SDMedicaid
enrollment changes
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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
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SD share of Medicaid costs
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Graphic by SD Budget & Policy Project
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Impact of initiated measure raising sales tax
• Distribution of cost across population
• Utilization of new funds – the details matter!
(50% Medicaid/50% k-12 education)
• Change in k-12 funding formula
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• increase revenue
• decrease expenditures
• combination of both
Balancing the Budget
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18 sessions in 16 communitiesTotal Attendance 464 (average of 27 per meeting) Legislators attending 53 of 105
“South Dakotans Talking” sessions
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