Governor Won't Seek Tax Increase To Fix SD Budget

CHET BROKAW

PIERRE, S.D. (AP) — South Dakota Gov. Mike Rounds said Monday he won't seek a tax increase to fix state budget problems that are expected to get much worse in the next two years.

Any tax plan likely would not get the required two-thirds vote from the Legislature, so the budget will have to be balanced with substantial spending cuts that can be made with simple majority votes, Rounds said.

"So the only thing we can do is make reductions in expenses at this time. That's kind of the direction we're going," Rounds told The Associated Press.

"As we work through the budget, everything is on the table," he said.

The governor starts meeting with his budget staff Tuesday to make final decisions on the proposed spending plan he will submit to the Legislature on Dec. 8. The details are likely to change as officials get more information about tax collections before the Legislature votes in March on a final budget for next year, he said.

While state tax collections have fallen because of the recession, the state also has been hit with more spending in programs that help unemployed people, particularly the state-federal Medicaid program that pays the medical expenses of low-income people, Rounds said, adding that 6,949 more people became eligible for the program the past 14 months.