State of South Dakota: Gov. Noem wants to 'cut taxes, provide relief'

Jan. 10—PIERRE, S.D. — Gov. Kristi Noem opened the 2023 legislative session with her State of the State address, a 45-minute tour following several of the points laid out in her budget address last month as well as discussing some of her administration's past successes.

Central to the governor's Jan. 10 speech was the health of South Dakota's economy and budget, a vitality that, in Noem's mind, allows the state legislature to responsibly do away with an estimated $102.4 million in revenue next year by permanently cutting the state's 4.5% levy on groceries.

"We continue to have record surpluses," Noem said, pointing to

another $10 million in extra revenue

from December 2022, according to Bureau of Finance and Management data. "What should we do with our surplus? My answer is simple: Cut taxes and provide relief to South Dakotans."

Noem also furthered her argument against other tax options potentially favored by some legislators, such as a p

roperty tax reduction

recommended by a summer study this past year., saying the grocery tax would apply to, "every South Dakota family, every person, every small business owner, even every homeowner."

Yet the role of the House and Senate, which combined in a joint session in the House of Representatives to hear out Noem's vision, will be squaring the circle of fiscal projections over the next 10 weeks as they race toward a constitutionally-mandated balanced budget and the more long-term goal of fiscal stability.

Unlike the hundreds of millions in "permanent revenue growth" that Noem says sits in the state coffers waiting to be sent back to the people — an estimate of about $310 million she rolled out in her budget address but mentioned in only a cursory manner in her State of the State address — numbers from the Legislative Research Council paint a

slightly more pessimistic picture of the state's economy.

In numbers presented to some of the legislature's highest-ranking members during an Executive Board meeting last month, the LRC projected that South Dakota's growth has been artificially buttressed by federal dollars and inflation, with real growth declining by 1.8% in 2022.

Still, on top of the breakneck growth of the past year, Noem painted a rosy picture of the future prospects of South Dakota's economy.

The governor spent a significant chunk of the address giving an overview of workforce challenges and opportunities in the state, calling the low unemployment numbers and high number of job openings in the state "growing pains." Noem pointed to actions by the legislature like recognizing health care licenses from other states as past examples of ways to fill open roles.

Noem wants that idea expanded this session.

"We have an opportunity now to finish the job and provide a path to recognize the licenses of just about every profession in the state," Noem said. "When other states have done this, they have seen their workforces grow almost immediately. Arizona's workforce has grown by about 5,000 workers since their law was implemented."

Noem also mentioned apprenticeships — both voluntary programs by the private sector and a planned expansion of the state apprenticeship program "later this year."

Another addendum to the workforce opportunities was the attraction of the industries of the future, from a $1 billion investment in Lake Preston from a company that will "turn corn into jet fuel" to an expansion of cyber research at Dakota State University.

Underpinning this economic expansion, Noem said, is South Dakota's conservative ideology.

"That's the kind of success you only see in a state where government is limited, personal responsibility is central to everything, and the private sector is unleashed," she said.

Following the governor's look at the economy, she moved on to policies past and future she hopes will help expecting and post-partum mothers.

In this vein, Noem recommended several family-related policies: a $25,000 grant to state employees who adopt a child; a "Stronger Families Scholarships" proposal, offering up to $4,000 in scholarship dollars to children in the foster care system, which can be used in a variety of educational contexts; and a $1.1 million proposal to give pregnancy care to moms on Medicaid.

"Pregnant moms who are at risk of poor birth outcomes will receive intensive care management. This will help moms have a healthy pregnancy — and this care will extend after birth," Noem said, adding that these mothers will then be eligible for the

Bright Start

program, a pregnancy-information program from the state Department of Health.

She also promised to "re-write" certain rules around child care. One example was partnering with the South Dakota Farm Bureau to help provide group-style health benefits to child care workers, a responsibility that previously would have fallen on individual employers.

"Our state has the highest rate of families with both parents working, so I'm pleased to see the governor talking about it," Sen. Jessica Castleberry, who works in the child care industry, told Forum News Service after the speech.

Noem's guests at the address ranged from the owners of Fair Market, a grocery store in Sioux Falls, to several state employees who had made the decision to adopt, meant to highlight several of the proposals in the address.

"Thank you for your service to our state — and thank you for providing a loving home for these kids," she said to the guests sitting in the upper level of the House.

Noem finished her speech with a reference to a quote from George Washington's 1790 State of the Union address, where he promised "ensuring to our fellow citizens the blessings which they have a right to expect from a free, efficient, and equal government."

"That is still our task today: to ensure a free, efficient, and equal government for the people of South Dakota," Noem said to conclude her remarks. "I look forward to working with all of you to get it done."

Jason Harward is a

Report for America

corps reporter who writes about state politics in South Dakota. Contact him at