Just over a year ago, I wrote a story for the Argus Leader taking a look at Gov. Dennis Daugaard’s famous 2011 budget cuts once all the dust had settled for the 2012 fiscal year. In it, I look at how Daugaard’s budget (with $127 million in cuts) played out given the state’s actual revenue, which ended up considerably higher than predictions at the time. I compared Daugaard’s budget to the two other plans at the time: one from outgoing Gov. Mike Rounds to cut $65 million and rely on reserves to fill the balance, and one from Democrats to cut $40 million.
If the increased state revenue would have occurred regardless of what spending cuts the state made (a debatable assumption, and one that Daugaard staffers contest), then Rounds’ less-severe cuts would have actually produced a surplus of around $10 million and wouldn’t have had to drain the state’s revenues at all.
When I interviewed Rounds for this story in July 2012, he downplayed his budget.
"We really established it knowing full well that Gov. Dennis Daugaard might want to make changes in it," Rounds said. "At this stage in the game, we really won’t second-guess what his decisions.”
I’m getting the sense, though, that Rounds might start second-guessing a little bit more as he draws fire from Republican primary rivals over leaving office with the projection of a large deficit.
Here’s what KELO wrote when they gave Rounds a chance to respond to criticism by Stace Nelson earlier this week:
In response to Nelson’s statements on the state deficit, the Rounds campaign says there was never actually a deficit when Rounds left office but a projection that there would be a budget shortfall because of the recession. Communications Director Mitch Krebs adds that Rounds proposed a budget that would have made cuts and used reserves to balance the budget before Daugaard took office.
That’s not going all the way to saying that Rounds’ budget would have actually fixed the problem, but drawing the distinction between a deficit and a deficit projection seems to be tip-toeing toward that.
Here’s what Rounds said in July 2012, from my story:
As it turned out, Rounds might not have had to use that one-time money. If state revenue had improved at the same rate it actually did, Rounds’ budget would have left a structural surplus of $10 million or more.
That’s what Rounds hoped would happen in December 2010. In his budget address, he defended using reserves to balance the budget because of the belief the economy would improve and solve the state’s budget shortfall for it.
Looking back, Rounds refused to second-guess Daugaard’s decision to pursue deeper cuts.
“Our expectation was of a growing economy, but that doesn’t necessarily mean it would have happened,” Rounds said this week. “It did, but there was also a probability we could have been entering into a double-dip recession that could have made matters worse.”
Will Rounds play the same tune in 2013 and 2014 as he defends his fiscal record?