SIOUX FALLS, S.D. (KELO AM) - The sales tax revenue shortfall for South Dakota could be as large as $28 million dollars from earlier projections.
As legislators head into the final three weeks of session, they may have to make spending cuts to get the budget to balance.
Executive Director of the South Dakota Budget and Policy Project, Joy Smolnisky, advises lawmakers to not rush to judgement.
Smolnisky says there is the anticipation of a potential increase in revenue coming from the Amazon collection of Internet taxes and possibly other vendors. She says lawmakers must decide between making deep cuts into existing programs on a short term basis or "ride this out knowing the shortfall can be covered by reserve accounts."
Smolnisky says the revenue figures may not be as dire as legislators are seeing.
Last year she says the state routed more money to counties and municipalities to help cover some of their costs saying "that revenue is no longer coming into the state." She says it's not that the state isn't collecting it in taxes, it's simply not coming in as revenue on the general fund side.
Smolnisky says those types of decisions make it look like the state's revenue is slower when in reality the revenue is being re-routed in other places.
She says Governor Daugaard is dealing with the federal government on a plan that could save the state millions.
He's still proposing that medicaid costs for tribal members, who have Indian Health Care, are covered 100% by the federal government. Smolnisky says that deal could net the state $50 million in decreased expenditures.