Simplified: Gov. Kristi Noem on Tuesday told lawmakers how she'd like them to spend state tax money over the next 18 months. Here's a look at some takeaways that – if passed by the Legislature – will affect folks in Sioux Falls.
Why it matters
- While the Legislature ultimately decides the annual state budget, the governor's budget address sets the tone for what priorities will be in Pierre.
- The state is coming into this budget year with a hefty savings account. There's more than $420 million in reserves, and last year saw a historic budget surplus of more than $115 million, Noem said.
- Noem emphasized a desire to create a budget that both upholds the wishes of the public (e.x. Medicaid expansion, which passed with 56% of the vote in November) but also maintain a conservative estimate on revenues and overall "low taxes, less regulation and more freedom."
"The people of South Dakota deserve safe planning that protects them from future tax increases or drastic cuts to state services," she said.
What are some big-deal items in Noem's proposed budget?
It's worth noting that this entire budget is large, complex and detailed, but from a 10,000-foot-view, here's a look at some of the pieces that'll likely spur the most discussion and make the most headlines during the upcoming Legislative Session.
Eliminating sales tax on groceries: Noem is sticking to her campaign promise of getting rid of sales tax on food, saying now is the time for this $100 million tax cut. Now, it's in lawmakers hands to decide if they agree.
Medicaid expansion: Though a statewide issue, this will certainly affect Sioux Falls and the two major healthcare systems housed here. And, for the first couple years at least, the federal government will pick up most of the tab when it comes to the cost of implementation.
- This coming year, Noem estimates the state will have to pay $13 million of the total estimated cost of $66 million.
More money for schools: Noem proposed a 5% increase in state funding for schools (as well as a 5% increase for state employees and health service providers). Her hope is to see most of that money go to salaries.
Paid family leave for state employees (and maybe more?): The governor also wants to give state government employees 100% of their salary during parental leave.
- She's also got a plan to spend $20 million over the next four years to incentivize businesses to buy-in to a paid family leave policy.
Planning the future of the state penitentiary: Noem is asking lawmakers to set aside $52 million to purchase land and conduct engineering and design to replace the existing aging facility.
Extra support for National Guard: Noem wants to see guard members get free tuition to state institutions. She's also asking lawmakers to appropriate $8 million in federal funding to complete the Sioux Falls Readiness Center.
What's not in the budget?
Childcare. Senate Minority Leader Reynold Nesiba said in a statement that South Dakota needs to talk about subsidizing childcare in order to address the crisis facing the state.
"I’m disappointed that the governor is failing to lead on this critical workforce development issue," Nesiba said.
Nesiba also said Noem's proposed 5% increase for state workers, educators and health service providers is not enough to match the inflation seen over the last two years.
What happens next?
The South Dakota Legislative Session starts Jan. 10, where we will again hear from Noem in her annual State of the State address.
The budget proposal is just that, a proposal. It'll ultimately come down to lawmakers to decide the state budget.