I realize that its a Saturday, which means that most of us are doing different things than during the rest of the week. Despite that, I wanted to crunch a few numbers with reference to Governor Daugaard’s proposed budget for next fiscal year. For purposes of these discussions, I’m going to compare previous actual budgets with the Governor’s proposal for 2017. Historically, the difference in raw numbers between the proposed and adopted budget is quite small, so it does not signify for the big comparisons we need to do.

Let’s start with some history:

- FY 2005: $2,907,686,333
- FY 2006: $3,055,919,196
- FY 2007: $3,186,869,182
- FY 2008: $3,340,084,390
- FY 2009: $3,548,708,486
- FY 2010: $3,919,562,591
- FY 2011: $4,064,074,188
- FY 2012: $3,959,175,442
- FY 2013: $4,006,460,307
- FY 2014: $4,090,632,223
- FY 2015: $4,259,323,695
- FY 2016: $4,326,703,120

And look at a possible future:

Next year’s proposed budget would appear to be a raw spending increase of 66% since FY 2005. In the same period of time, the state’s population has increased from 783,033 to 853,175 (as of 2014, the last year for which I could find firm numbers). Let’s be generous and say that the state’s population will go up to 875,000 by the time the new budget would begin.

As a per capita cost, then, we would have the following:

- FY 2005: $3,713
- FY 2017: $5,517

Doing the same math we did for the budget numbers above, that would work out to having spending indexed to population increase by 49% since FY 2005.

And yes, we still need to look at inflation. If we average inflation over the years from 2005 through 2017 (realizing that inflation years and fiscal years don’t quite match up, and the future hasn’t happened yet) we would get 2.44%. To arrive at that, I put the unknown current/future years at a 3% rate of inflation since that is the usual placeholder, at least in modern times.

If we adjust for a 2.44% annual inflation rate, the FY 2005 budget of $2,907,686,333 would increase to $3,883,134,136 for FY 2017. This works out to a 34% increase due to inflation.

If we go back to our per capita valuation from above we could change that list to the following:

- FY 2005: $3,713
- FY 2017: $5,517
- FY 2017: $4,975 (if spending had kept pace with inflation and population only)

We find then that the per capita cost of the South Dakota budget has increased by 15% more than can be explained by population increases and inflation load since FY 2005.