Estimates show state economy is rebounding, revenues grow 3 percent

Citing a slowly recovering economy and increased expenses from federally subsidized healthcare programs, Gov. Mike Rounds told lawmakers during his FY11 budget address that the state can’t afford to provide K-12 education with the legally required 1.2 percent per-student increase.

By forgoing the increase, which amounts to $57 per student, the state can save $4 million next year. The governor also plans to freeze property tax levies for FY11, a maneuver that will shift an additional $4 million from state expenses onto local property tax payers, bringing the state’s total cost-savings to $8 million.

The governor issued warnings regarding the health of the state budget in recent months, reportedly telling various groups that the state’s budget hole was as large as $170 million. During his budget address to lawmakers on Dec. 8, Gov. Rounds fleshed out the state’s economic picture.