State water board hopes to get $10 million

The annual rite is here again. State government’s Board of Water and Natural Resources took the first step Thursday in lining up a request to the Legislature for a special appropriation in the 2018 session.

The board sent a recommendation for $10 million up the line to Gov. Dennis Daugaard. In turn the governor will do as every governor has in recent decades and ask lawmakers for the money.

By mid-March, the gang of 105 will have decided if the state treasury can bear one more bit of burden (if $10 million can be considered ‘one more bit’).

Sales of jackpot lotto sales slumped during the past fiscal year. That bears on state funding for water and waste management projects.

Here’s how it works: For every dollar gambled by a lotto player, 50 cents go back in prizes for players and 20 cents go to vendors, commissions and administration at the South Dakota Lottery.

That leaves 30 cents of net revenue for state government.

For fiscal 2017 that ended June 30, the general fund received about $1.4 million and the capital construction fund got more than $5.5 million from lotto.

From the $5.5 million, nearly $4 million of lotto money went to the water and environment fund that the state Department of Environment and Natural Resources runs.

The bad news is the water and environment fund has been struggling against a downward trend in lotto proceeds.

The amounts that lotto sent to the water and environment fund gradually declined year after year, from more than $6.1 million in fiscal 2013 to $3,976,075 in fiscal 2017.

The water and environment fund also took in more than $4.8 million from the petroleum release compensation and tank-inspection fee during fiscal 2017.

So, combine the $4 million and the $4.8 million and you get, to be precise, $8,818,900. That’s less than was available the two previous years. There was $9.9 million in fiscal 2015. In fiscal 2016, there was $10 million.

The water and environment fund was intended to help pay for water projects and solid-waste projects. When all the math was finished, the board requested $7.5 million for water projects and $2.5 million for solid-waste projects.

The numbers balance amid a projected shortfall of $2.1 million; capital construction transfers of nearly $9.6 million; another $830,000 from loan repayments and interest; and solid-waste fees totaling $1.7 million,

Department official Jim Feeney told the state board Thursday the 2018 request would mark the first time in a long time – maybe forever – that the board wouldn’t be asking for money for major water projects as part of the annual omnibus bill.

Meanwhile Revenue Secretary Andy Gerlach and Norm Lingle, the lottery’s executive director, are trying to turn around lotto sales.

“It’s a year to year process,” Feeney told the board.

Here’s a diagram the board received in its meeting packet Thursday: