The Bureau of Financial Management (BFM) began hearings for the Governor’s FY2019 budget, starting with various South Dakota agencies: School and Public Lands, Attorney General, Bureau of Administration and the National Guard.
The South Dakota Revenue and Economic Update report from BFM provides a current economic condition for South Dakota, including:
- Drought conditions over much of the state are expected to have negative impacts on crop production and overall farm income in 2017. Crop prices received by SD producers in May 2017 were similar to a year ago.
- SD farm income peaked in 2011 at $3.8 billion and registered $0.8 billion in 2016. The recent declines are primarily due to lower crop prices from a strong US dollar, large supplies, coupled with weaker demand.
- Sales and use tax is the largest component of the state general fund revenue stream, accounting for 63 percent of general fund revenue. Lower spending on farm equipment, low inflation and growth in e‐commerce sales are all contributing to the weakness in taxable sales; through five months since the most recent adopted estimate for FY2017, total ongoing general fund collections were $6.0 million less than estimated levels.
- Contractor’s excise tax collections contribute about 7 percent of total ongoing general fund revenue and offers an indicator on the health of construction activity across the state; through twelve months of FY2017, collections grew 5.3 percent over the same time period a year ago.