PIERRE, S.D.(Press Release) – On Monday, Governor Kristi Noem announced that South Dakota closed the 2022 budget year on June 30 with a surplus of $115.5 million. Total general fund revenue for fiscal year 2022 finished $72.3 million higher than adopted estimates, and the state general fund budget ended with expenses $43.2 million less than budgeted.
“South Dakota has the strongest economy in America and a strong financial position to match,” said Governor Noem. “We live within our means and operate government conservatively. Low regulation, low tax burden and business friendly policies are still the recipe for economic success.”
Actual general fund revenue for fiscal year 2022 was unexpectedly higher than recent adopted forecast estimates. In total, revenue finished above the adopted forecast by $72.3 million, or 3.3 percent. Sales and use tax, which is the state’s largest revenue source, finished $36.6 million above estimates and grew 12% over the prior fiscal year. A combination of all other sources of general fund revenue finished the fiscal year $35.7 million above legislative estimates.
South Dakota’s personal income growth led the nation again in the first quarter of 2022. South Dakota has been a leader in this metric since the start of the COVID-19 pandemic. People continue to move to South Dakota as our net inbound migration was ranked second in the nation, while South Dakota’s 2.3% unemployment rate is among the lowest in the nation and lower than before the pandemic.
“We must remain cautious and conservative due to 40-year highs in inflation caused by the Biden Administration’s heavy spending and regulation,” said Governor Noem. “However, we are prepared to weather any economic storm thanks to our structurally balanced budget, fully funded pension, and strong reserves.”
By law, the fiscal 2022 surplus of $115.5 million was transferred to the state’s budget reserves. The state’s reserves now total $422.6 million or 20.5% of the fiscal year 2023 general fund budget.