Republican leaders in the House and Senate unveiled a broad list of proposed cuts to state government Thursday, proposing to eliminate next year’s structural deficit by reducing spending by more than $43 million.

The proposal includes a 2 percent across-the-board cut for all state agencies except K-12 funding and Medicaid. Other major cuts include eliminating the drug court program and the Intensive Methamphetamine Treatment Program and cutting $2.3 million from tobacco prevention programs.

Not included in the leadership’s proposed cuts was a rumored reduction in funding to South Dakota Public Broadcasting, though money can be added and taken away from programs by any legislator as the final budget bill is shaped.

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Senate Majority Leader Dave Knudson and House Majority Leader Bob Faehn said the cuts are necessary to avoid tax increases now or in the future.

“I believe it could be classified as a budget crisis situation,” said Faehn, a Republican from Watertown. “I think it was made clear by our constituents across South Dakota that government needs to be downsized before they’re willing to pay more in taxes. We’re doing the responsible thing our constituents asked us to.”

But Gov. Mike Rounds savaged the Republican leadership’s proposal for its use of non-targeted cuts and for the impact the cuts would have on recipients of government services.

“You simply have to recognize that you impact specific programs (with across-the-board cuts) — that if they go away, the individuals that work in those programs are eliminated as well,” Rounds said. “Just as importantly, the individuals receiving those services or those benefits have to be recognized.”

Republican legislative leaders said wish they didn’t have to propose the cuts.

“No one enjoys this sort of thing,” Faehn said. “An economy such as what we’re in causes us to sometimes take actions that aren’t necessary our first choice.”

“We cannot continue with deficit spending,” said Sen. Jean Hunhoff, R-Yankton, chairwoman of the Senate Appropriations Committee. “Some of us had to bite the bullet and say, ‘I will go with that direction.’”

One reason for the cuts Faehn and Knudson proposed Thursday is next year, where the disappearance of federal stimulus dollars means a deficit in excess of $100 million if cuts aren’t made and the economy doesn’t improve.

Rounds’ proposed budget would have used more than $30 million from the state’s budget reserves this year.

“I think you have to decide whether a rainy day fund is there for the purpose of trying to eliminate as much pain on individual citizens as opposed to simply saving some more savings,” Rounds said. “I think the role of government and elected leaders is to manage the budget, to use the taxes available and the resources that are available to reduce the amount of pain on individuals that need a helping hand.”

Faehn and Knudson said their cuts should lead to minimal layoffs, including three full-time equivalent positions from the drug court and 16 FTEs from the meth treatment program.

But Rounds said the across-the-board cuts will probably mean layoffs.

“You cannot take $15 million out of the operation of state government and exclude Medicaid and exclude K-12 education without impacting state employees,” Rounds said. “You will have to cut programs and when you cut programs that deal with providing services, the individuals that are providing services are state employees. You will cut state employees.”

Faehn and Knudson said they proposed more cuts than they believe are necessary to close a budget shortfall that has grown to around $40 million. If the state’s revenue forecasts — expected to arrive Monday morning — don’t worsen, not all the proposed cuts will be included in the state’s general budget bill.

Advocates for programs on the chopping block are already voicing their discontent about the proposals.

“We’re disappoint to see (tobacco prevention) on the cut list, but we understand the process,” said Jennifer Stalley, director of government relations for the South Dakota chapter of the American Cancer Society. “We’ll be working to have the Legislature reconsider that because it’s a successful program that saves us money in the long term.”

“The proposed cuts are disappointing and would be difficult for the court to absorb without compromising our ability to meet the needs of the public,” said Chief Justice David Gilbertson in a press release. “The proposed abolition of the drug court program means all those who would have been candidates for it will instead be in the penitentiary at a significantly higher cost to the taxpayers than the current drug court alternative.”

Corey Landeen, executive director of the South Dakota State Employees Organization, said he’s relieved that rumored cuts such as state employee furloughs aren’t in the proposals, but worries about the impact across-the-board cuts could have on state employees.

But Republican leaders said the cuts are necessary.

“Without a broad sharing of the burden of these cuts, you weren’t going to be able to achieve the necessary dollars,” said Knudson. “Our economic situation is obviously very bad.”

The Legislature’s appropriations committees will begin holding hearings and taking action on budget proposals Wednesday. Unless lawmakers extend the session, a final budget must pass by next Friday.