- Associated Press - Monday, November 28, 2016

PIERRE, S.D. (AP) - Gov. Dennis Daugaard says his upcoming budget proposal will have no major new spending because of dipping tax collections.

The Republican governor wants to use one-time money this year to plug an expected budget shortfall. Daugaard is set to make his budget address next month, and lawmakers will make revisions to the current budget and shape the next one during the legislative session.

State revenues are about 3.6 percent below lawmakers’ projections - about $20 million from July through October. Nearly all of that is from lower-than-expected sales tax collections. Cautious consumer spending, low commodity prices and e-commerce transactions that avoid state sales taxes have hindered growth in the state’s main revenue source, State Economist Jim Terwilliger said.

Some state expenses are also coming in under budget this year, but not enough to fully offset the short revenues, Daugaard said. Current collections help set the base for spending next fiscal year, which spells a “pretty lean” budget in budget year 2018, the governor said.

“We’re still seeing revenue growth, it’s just not as robust as we had projected,” Daugaard said.

It will likely mean small funding increases for public schools, state employees and health care providers including nursing homes, community mental health centers and other facilities that rely heavily on the Medicaid program.

It also signals not enough money to freeze tuition at the state’s public universities or create expansive new programs.

Collections aren’t coming in at levels necessary to pay for substantial increases in government, said Republican Sen. Deb Peters, who has served as chairwoman of the Legislature’s Joint Committee on Appropriations.

“We really have a lack of resources to do a lot of the fun stuff,” Peters said. “The fun stuff is going to have to go away.”

Incoming Senate Majority Leader Blake Curd, a Republican, said balancing the state budget is “top of the ticket” for the upcoming session, which is set to start in January and close in late March.

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