MITCHELL, SD (Mitchell Now) — South Dakota lawmakers received a brighter-than-expected budget outlook Thursday after the state’s latest revenue forecast showed collections about $30.9 million higher than originally projected.

Senate Majority Leader Jim Mehlhaff said there is interest in using the additional revenue to fund a 1.25% increase for what legislators often call the “big three” — K-12 education, state employee compensation and community service providers.

House Minority Leader Erin Healy said the revised forecast gives lawmakers an opportunity to prioritize investments in people after Gov. Larry Rhoden proposed flat funding for education and other major spending areas in his earlier budget recommendations.

The Legislative Research Council has estimated a 1.25% increase would cost $30.9 million, while a 1% increase would cost $24.8 million.

Both the House and Senate are expected to poll their caucuses as leaders work toward budget targets and broader spending priorities. Lawmakers are also weighing competing requests totaling about $163 million in one-time spending.