Governor Noem delivers Budget Address in Pierre

PIERRE, S.D. – Beginning at noon Mountain Time, Governor Kristi Noem will present her proposed budget for the 2023 and 2024 fiscal years. This will include recommendations for changes to the current budget as well as key policies to include in the budget for the next fiscal year.

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The budget proposal of the governor is not legally binding, but the request of the highest executive authority in the state tends to push the legislature to address particular policies. This is particularly true of high-profile topics like the proposed grocery tax cut or the now-stalled $200 million housing development program passed last year.

The legislature will work out the details of the budget over the course of the upcoming legislative session, which runs from January to March, and the budget will take effect on July 1 along with almost all other bills passed during the legislative session.

Looking ahead:

In a release issued on December 2, Noem gave some hints as to what her budget proposal will include:

“On Tuesday, December 6, I will be unveiling my budget for the upcoming fiscal year. As I promised, this budget will include a complete elimination of the state sales tax on groceries. That is how we can return some of our record revenues to the people – and we can afford it thanks to our record growth.

We will also continue to support South Dakota schools, public safety, and our healthcare obligations. This budget funds essential state services. My budget also includes targeted investments to combat inflation that is being driven by President Biden’s reckless spending out of Washington. It will focus on building stronger families in our state. And it will make key investments in both infrastructure and public safety to continue making our state safer and stronger.”

Grocery taxes

Of particular interest is the proposed $100 million state-wide tax cut on groceries that Noem announced her support for earlier this year.

The proposal previously passed the state house and failed in the state senate, but has never before had the public support of the governor.

Even with the governor’s support, any tax cut would still have to pass through the state legislature, and there’s no guarantee that they would pass the measure.

The proposal would eliminate the state sales tax on groceries, but would continue to allow municipalities to tax groceries at up to a 2% rate.

Inflation

Last year, the governor included a 6% increase to the wages of government, healthcare, and education workers as a response to record inflation.

Inflation has remained at record highs since, but it is unknown whether there will be additional pay increases this year.

South Dakota state agencies, such as the South Dakota Highway Patrol, and school districts have struggled to retain and recruit workers over the past year.