Senate Appropriations Minutes 02/20/2002 10:30 AM

Committee: Senate Appropriations

Wednesday, February 20, 2002

                                            P - Present
                                            E - Excused
                                            A - Absent

Roll Call
P    Putnam, Vice-Chair
P    Madden
P    Kleven
P    Greenfield
P    Apa
P    Duxbury
P    Dennert
P    Drake, Chair
P    Cradduck

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Co-Chair Richter

(The meeting was held jointly with the House Appropriations Committee)

REVENUE ESTIMATES

Mr. Jason Dilges, Bureau of Finance and Management, presented the committee with FY2002 Economic and Revenue Forecast (Document #1 and #2).

Included in his presentation was a series of charts showing the United States and South Dakota economies. He shared that the economic forecast has a more positive outlook than was previously reported in December, 2001. Mr. Dilges said that there will be a $14,300,000 shortfall for the FY2002 and for FY2003, there will be a $35,000,000 shortfall.

In his prepared remarks, Mr. Dilges told the committee that due to the 0 percent financing for vehicles and the warm winter weather, the economy is looking better. Automobile sales are up and construction continues to grow. He said that consumers are paying their bills.

Mr. Dale Bertsch, LRC, presented the committee with FY2002 and FY2003 General Fund Revenue Estimate (Document #3).

Included in his presentation was a sales tax collections history along with other economic variables. He explained that there are countless factors which affect the amount of sales and use tax paid into the state treasury in any fiscal year. These factors include economic variables that are quantifiable such as production, income, and consumer price data. Other factors are measurements of consumer confidence, natural occurrences such as drought, flood, blizzards, etc. Also entering into the mix are changes in consumer patterns and changes to the tax laws that may provide for tax exemptions or expansions to the tax base.

Senator Putnam made a motion to adopt the FY2003 Bureau of Finance and Management revenue estimate of $843,576,456. Senator Madden seconded the motion.

Representative Adelstein asked what the consequences of a $2,000,000 deficit would be.

Senator Duxbury said the LRC and the Bureau of Finance and Management estimates are so close that he would be comfortable with the lower estimate.

A substitute motion was made by Senator Apa to adopt the FY2003 LRC revenue estimate of $841,429,859 and seconded by Senator Dennert. Motion prevailed on a roll call vote.

Senators voting aye: Kleven, Greenfield, Apa, Duxbury, Dennert
Senators voting nay: Putnam, Madden, Cradduck, Drake

Representatives voting aye: Lange, Burg, Adelstein, Sutton (Duane), Klaudt
Representatives voting nay: Derby, Pummel, Clark, Richter

Representative Richter deferred the pending motion, and asked for a motion for the FY2002 revenue estimate.
Representative Adelstein made a motion to adopt a revenue estimate for FY2002 of $833,000,000. It was seconded by Senator Apa. Motion prevailed on a roll call vote.

Senators voting aye: Putnam, Madden, Cradduck, Kleven, Greenfield, Apa, Duxbury, Dennert,
Excused: Senator Drake.

Representatives voting aye: Lange, Burg, Adelstein, Sutton (Duane), Klaudt, Richter. Representatives voting nay: Derby, Pummel, Clark

MOTION:     ADJOURN

Moved by:    Adelstein
Second by:    Madden
Action:    Prevailed by voice vote.

Carol Carney

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