South Dakota doesnt have to rob Peter to build a prison

To understand South Dakotas state budget situation, imagine youre part of a family thats been saving up to build a dream home.
Perhaps you recently experienced a sad event the death of a relative that turned into financial gain with a large inheritance. Youve worked a lot of overtime the past few years while times were good in your industry. Youve paid down or paid off your credit cards, student loans and car loans. Your credit score has risen.
Because of all those factors in and out of your control, youve been able to do something remarkable. Youve socked away more than two-thirds of the money youll need to build that house.
Then your situation changes.
Things go south in your industry, and your boss cuts your hours at work. An unforeseen health problem pops up. Your kids become teenagers, and they need cars and car insurance and money for college.
Your plan to save the rest of that money for your dream home runs up against reality. But your living situation is getting worse. Youre in an old house thats deteriorating.
Do you say to your family, Sorry, youre going to have to postpone that doctor visit, were all going to share one car, nobodys going to college, and were also cutting back on food, clothing and fun, so we can pay cash when we build a house?
I doubt it. Like most of us who live in the real world where compromise is unavoidable, youd probably use your savings as a down payment on the house, and then use your good credit to get a loan for the rest, realizing you can always make extra payments and pay off the debt early.
How does this relate to state government?
For South Dakota, the sad event was the COVID-19 pandemic. The inheritance was billions in federal pandemic relief money. The overtime pay was sales tax revenue fueled by the federal dollars circulating in the economy. The savings are $569 million that legislators set aside during the past few years.
And the dream home is a prison. Thats an odd thing to dream about, but this is South Dakota, where Republicans have been in charge for decades.
Those Republicans showed commendable discipline by shoveling some money into savings while the state was flush with cash.
But now things have changed. The federal pandemic money is spent. Sales tax collections are declining. The state penitentiary parts of which date to 1881 is so outdated that prison officials say its unsafe. Its time to make difficult decisions.
Gov. Kristi Noem wants to put away more money to replace the penitentiary. Accounting for the interest she expects the state to earn from the $569 million already in the prison savings account, she said the state needs another $182 million to build the $825 million facility without incurring debt.
To come up with that $182 million, shes proposing cuts. Those include delaying maintenance and repairs of state buildings, giving only a 1.25% funding increase to schools, and making severe cuts to agencies including public broadcasting, the State Library, the Department of Social Services and the Department of Human Services. The latter two departments manage an array of programs including Medicaid, child care licensing, child protection, foster care, food assistance, and support programs for elderly and disabled people.
Meanwhile, you may have heard some of our states leaders brag about South Dakotas triple-A bond rating. Thats an outstanding credit score. It means the state can borrow money at great rates.
Before legislators begin considering Noems budget proposals next month, they should ask their constituents some questions. Do they want drastic cuts in public services so the state can pay cash for a new prison? Do they want to avoid some of those cuts by borrowing money to finance part of the prison project? Do they want lawmakers to take another look at factors affecting the projects cost, such as the size, design and proposed location south of Sioux Falls?
It seems clear South Dakota needs to do something about its penitentiary, and paying cash to build a prison sounds fiscally responsible.
But fiscal responsibility isnt just about balancing numbers. Its also about balancing goals like debt avoidance with other priorities, such as the services that South Dakotans need, want and expect to be delivered with the tax dollars they provide to their government.