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• House Republican Leader David Lust of Rapid City said he and many other lawmakers were surprised the governor was able to propose 3 percent spending increases for schools and other programs.
• "I think that unclaimed property windfall is a game-changer," Lust said.
• Lust also said the tuition freeze is critical because the state needs to provide an affordable education to develop its workforce.
• House Democratic Leader Bernie Hunhoff of Yankton said it makes sense to use reserves and other one-time money to support key programs, but many lawmakers will seek to boost spending on schools by more than the 3 percent recommended by Daugaard.
• "It in no way heals our schools," Hunhoff said of the governor's proposal. "We've created a huge crisis in our schools and this is not going to fix it, but it's probably a decent first step."
• State law calls for aid to school districts to increase each year by the level of inflation, up to 3 percent. That would require an increase of 1.6 percent in school aid next year. In some years, the Legislature has given schools extra money, but there was no increase in 2010 and aid was cut in 2011, when the sluggish economy limited tax collections.
• This year's unclaimed property windfall resulted from a change in state law that requires such property to be turned over to the state after only three years of inactivity, rather than five. Two large banks also located their home offices in South Dakota, increasing the pool of idle accounts.
• Daugaard is proposing to use $30 million in this year's one-time money from unclaimed property and other sources to fund an economic development program that otherwise would have required funding next year. He also is using $58 million in one-time money to pay off some state building bonds early, saving $6.3 million a year in ongoing bond payments.
• In addition, he wants to pay cash instead of bonding for $16.4 million to pay the state's share of the cost of a new State Veterans Home in Hot Springs.
• Those early payments will free up money next year to cover the spending increases in education, health care and state employee pay raises, he said.
• As expected, Daugaard said he is not recommending that South Dakota expand its Medicaid program to cover the health care costs of more low-income people, at least not in the next budget year. The federal health overhaul law gives states the option of expanding the Medicaid program, and officials have said that would add 48,000 South Dakotans to the program.
• Daugaard has said he doubts the federal government can meet its pledge to pay most of the expansion costs. He said Tuesday the implementation of the federal

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