SIOUX FALLS, S.D. (AP) - South Dakota ended its fiscal year with a $19 million surplus despite revenue coming up shorter than expected, Gov. Kristi Noem announced Thursday.
The coronavirus pandemic caused state revenues to fall short of what was estimated by almost $8 million. But the state also spent less than what was budgeted, resulting in the surplus. Some economic signs indicate the state is ready to weather the economic downturn from the pandemic, but recent gains in the job market have stalled.
“Despite the challenges with COVID-19, South Dakota remains in a strong financial position,” Noem said in a statement. “As many states closed their economies, I trusted South Dakotans to make the right decisions for themselves and their loved ones.”
Most of the saved money came from executive branch agencies, while the sales tax saw the biggest shortfall. The $19 million in surplus was transferred to the budget reserve fund.
The Republican governor has touted her hands-off approach to the pandemic, saying it shows that South Dakota is a business-friendly state. She has pointed to the fact that South Dakota’s gross domestic product had the second-smallest contraction of any state in the first quarter of the year, according to the Bureau of Economic Analysis. The analysis covered the first several weeks of the pandemic in the U.S.
But as an economic recovery stalled across the country, new unemployment claims in South Dakota increased during the most recent reporting period. The South Dakota Department of Labor and Regulation reported Thursday that 1,160 people made new claims for unemployment benefits during the week ending July 11. That’s 325 more than the previous week, and an increase of 40%.
A total of 18,687 people were receiving unemployment benefits statewide on July 4, according to the U.S. Employment and Training Administration. The number of continued state claims has decreased by 6,500 from a historic high in May as the coronavirus pandemic caused businesses to shutter.
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