SIOUX FALLS, S.D. (KELO) — While momentum around cutting the state sales tax on groceries has stalled in the South Dakota Legislature, a possible 2024 ballot measure has loomed over the debate.
Rick Weiland, a longtime Democrat and co-founder of Dakotans for Health, is weighing his next move with two pending ballot measures (one Constitutional amendment and one initiated measure) aimed at stopping the sales tax on groceries.
“Ultimately, my hope would be for Pierre to do this, so we don’t have to,” Weiland told KELOLAND News. “There’s support for it. The governor knows it. I think a lot of legislators know it. I think they made a mistake by not supporting her effort.”
Governor Kristi Noem’s effort was House Bill 1075 which was defeated by an 8-1 vote by lawmakers on the House Appropriations Committee.
Despite the defeat, tax cut discussion continues in the final seven days of the legislative session. On Tuesday, Noem waded back into the debate and criticized Republican lawmakers for “opting for a temporary rate reduction in the overall sales tax rate of 30 cents for every $100 spent.”
Noem’s response came one week after the House Republican caucus position was ultimately unveiled during the House Appropriations Committee after Noem testified and advocated for a grocery tax elimination.
Since then, a Senate committee has put a two-year sunset clause on a proposal to reduce the sales tax from 4.5% to 4.2%, while the House sent another bill without the sunset clause over to the Senate.
During testimony to lawmakers, Noem hinted at Weiland’s ballot measure and doubled-down on that concern this week.
“They have chosen this option because they recognize that the people of South Dakota will support repealing a sales tax on groceries in the near future,” Noem said in her video. “They are worried that they can’t afford two tax reductions.”
Weiland confirmed Dakotans for Health is not currently circulating a petition on the two grocery tax ballot measures but will be submitting final petition forms to the Secretary of State’s office soon. Those final petition forms will include updated Attorney General statements and Legislative Research Council fiscal notes.
While Dakotans for Health is currently gaining signatures for a Constitutional amendment to establish a right to an abortion in South Dakota, Weiland said he’ll be looking to build a coalition by cutting the sales tax on groceries and that could include Noem.
“Absolutely. We don’t find enough common ground in this country anymore at the national or the state level,” Weiland said about asking Noem to sign the petition. “Americans for Prosperity, they like to cut taxes. I wouldn’t rule anything out.”
On Wednesday, Noem told KELOLAND News South Dakota is one of only seven states that still taxes groceries and she’d support the ballot measure.
“It would be impossible for me to come out against it,” Noem said. “I think it’s the right tax at the right time. The legislature needs to realize if they chose a different tax cut this year, they better make sure they can afford the repeal on the sales tax on groceries in a couple years too. They’re going to have to do both.”
House Republican lawmakers have countered saying the reason for supporting an overall sales tax cut rate is because the state already offers low taxes.
“Ultimately, it was a real priority of the House Republicans that we have a broad tax base and low tax rates,” Republican Rep. Will Mortenson said in a leadership news conference last week. “We wanted to cut taxes on everything from food to fireworks to fencing equipment.”
Weiland questioned how that relates to people who have to pay a tax to eat.
“I mean, that, to me, seems to be very callous and insensitive to a segment of the population that’s really struggling,” Weiland said. “That’s what the governor said when she was campaigning – she was out and about talking to people. We’ve got a serious problem when it comes to inflation and everything’s going up except wages.”
Weiland also called the grocery tax “regressive” and noted only three states tax groceries at the same sales tax rate without credits or rebates for lower-income families. In past statewide elections, ballot measures cutting the state sales tax on food failed in 2004 and 1992.
He said South Dakota’s strong citizen democracy system is in place when lawmakers and popular ideas don’t go into effect.
“We’ve got this kind of citizen outlet and an opportunity to do things like Medicaid expansion, cannabis reform, payday lending reform, secondhand smoke reform and Deadwood gambling,” Weiland said. “All the things that the citizens have come together on when Pierre won’t.”