- Associated Press - Tuesday, February 14, 2017

PIERRE, S.D. (AP) - South Dakota lawmakers settled on state revenue targets Tuesday that are millions of dollars lower than past projections, meaning the state will be have much less to spend this legislative session than previously anticipated.

The Legislature’s Joint Committee on Appropriations approved projections that are significantly lower than those Gov. Dennis Daugaard included in his December budget address. The governor will work with the Legislature to make up the difference, Bureau of Finance and Management Commissioner Liza Clark said in an email.

Daugaard had proposed modest increases for the upcoming fiscal year to key budget areas including education, Medicaid providers and state workers. But he has since warned that even those might be too much.

The committee adopted a $1.59 billion target for the upcoming 2018 budget year, which starts July 1. That’s down about $27.8 million, or about 1.7 percent, from the governor’s December budget. Lawmakers also set a roughly $1.55 billion current-year ongoing revenue target, which is down roughly 1.6 percent - or $25.3 million - from what the governor previously proposed.

Bureau of Finance and Management Deputy Commissioner Jim Terwilliger, the state economist, has said the causes include low inflation, less spending in the farm economy and e-commerce transactions that avoid sales taxes, the state’s main revenue source.

“Once that determination of the adopted revenue is made, then spending must be confined within that,” Daugaard told reporters last week. “All I can say is that we continue to see weakness.”

Republican Sen. Deb Peters, a member of the Senate Committee on Appropriations, said this session is among the most difficult she’s seen since starting in the Legislature.

“We’ve got a tough road to climb right now,” she said.

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