As Gov. Dennis Daugaard says, we are cautiously optimistic about his proposed 2013 budget for South Dakota.
Last week, Daugaard said South Dakota was in much better shape for 2013 than fiscal year 2012, when the governor proposed 10 percent cuts across the board. He's now laid out a $23.4 million plan to give some needed salary relief to state employees, who haven't seen a raise in three years, along with putting money back toward education and Medicaid.
SALARIES: Daugaard proposed one-time 5 percent bonuses for state government employees followed by a 3 percent raise.
EDUCATION: Funding would be available for a 2.3 percent increase for education plus an additional $12 million in one-time money.
MEDICAID: Medicaid providers would see a 1.8 percent increase in their reimbursement rates under Daugaard's proposal, plus $9.1 million in one-time money.
Daugaard also suggests pulling $20 million from reserves - reserves he steadfastly refused to touch for 2012 - to go toward flood damage and fighting the mountain pine beetle in the Black Hills.
We think the governor has a solid plan.
Despite criticism earlier this year, Daugaard held firm that South Dakota was in a financial mess and needed to take drastic measures to lift itself up. That meant no raises and cuts that are still being felt today.
Now, the governor says we are back on track and he makes the first moves to reinvest in South Dakota.
For instance, South Dakota took in about $12 million more this year than expected. That money came from a sales tax increase and contractor's excise and bank franchise taxes.
That money is wisely being put toward some of the increases we're seeing in spending.
The mood at the Ramada Convention Center in Aberdeen on Monday was positive, as Daugaard laid out his plan to area lawmakers and citizens at a pre-legislative luncheon.
It will be hard for opponents to argue against Daugaard's proposal. His plan to cut in 2012 appears to have been a difficult but necessary choice. His plan to give one-time bumps to offset those cuts, followed by slowly putting money back into the system, seems to be wise.
While no one knows what will happen with spending at the federal level, we can be thankful that South Dakota has looked a fiscal deficit in the eye and made the necessary changes to get back on track.
In earlier editorials, we suggested Daugaard's cutting plan had merit, but we'd likely have a different opinion if 2013 didn't see reinvestment into workers and programs.
This proposed budget does those things and appears to be the right way to go for the state's long term financial health.