South Dakota

State Budget Practice Report Cards and Budget Resource Guide

South Dakota ranked among the best-performing states in the Volcker Alliance’s examination of budget practices across the nation for fiscal 2015 through 2017.  It earned straight A’s in budget maneuvers and legacy costs, and averaged B’s in the other three categories evaluated.

The state’s only low grade—a D for budget forecasting in 2015—improved to a B the following two years thanks to an executive order signed by Governor Dennis Daugaard after the start of fiscal 2015. That order put in place requirements for forecasts for the current fiscal year and three succeeding fiscal years. It also required input from the governor’s Council of Economic Advisors and the use of other relevant financial planning information.

South Dakota was one of only seven states to post A’s on legacy cost practices in all three years. This is a slightly lower hurdle for South Dakota than for other states, as it has no liabilities for postretirement health benefits and thus no need to fund them in advance.

The state did similarly well in avoiding budget maneuvers, which include deferring recurring expenditures, shifting costs and revenues, funding recurring expenditures with debt, and using asset sales and up-front revenues.

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2017 Volcker Alliance report, Truth and Integrity in State Budgeting: What Is the Reality? which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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