Governor Kristi Noem took a careful approach Wednesday in her first budget proposal to the South Dakota Legislature.
She differed from previous Governor Dennis Daugaard by sprinkling a little more money here and there, such as for fighting methamphetamine and providing more care for senior citizens.
The two Republicans however are of similar minds when it comes to online sales tax revenue. Neither governor wants to count on money before it’s shows up in the state treasury.
Where they disagreed was on Daugaard’s proposal to have state government employees pay for part of their healthcare insurance. Noem said that’s too far to go.
Republican Senator John Wiik of Big Stone City said the Legislature’s Joint Committee on Appropriations would dig into Noem’s budget plan Thursday morning. He is a co-chair of the Senate and House panel.
Noem’s theme was South Dakota For The Next Generation. At one point Wednesday she said state government should be just as cautious as a family about spending money that hasn’t shown up yet.
She came into the House chamber to a standing ovation.
“I know she’ll keep fiscal conservatism as the cornerstone of her administration,” Senator Brock Greenfield, R-Clark, told the joint assembly of senators and representatives moments before she entered.
Noem explained the principles of her budget management approach: Fiscal integrity, a strong foundation for economic growth, retain state government’s AAA bond rating and maintain state government’s 10 percent general-fund reserve.
“As I’ve stated before, we will not raise taxes,” Noem declared.
She said her administration had launched a new government-transparency website Wednesday that she described as more intuitive, easier to navigate and offered what the public wanted.
Noem said she hadn’t built any additional growth into the state sales-tax forecast, despite South Dakota coming out on the winning side of the U.S. Supreme Court decision in the Wayfair case last year.
South Dakota began collecting taxes from some of those businesses in November, and others such as third-party marketplace sellers don’t have to start until March 1.
“We don’t spend money in South Dakota we don’t have,” she said. “We should be patient. We should get hard data to make sure, before we make any budget projections.”
Noem also said it would be wrong to start cutting the state sales tax from its 4.5 percent rate on most transactions.
Under a 2016 deal that raised the state sales tax to 4.5 percent for property-tax relief and higher K-12 teacher salaries, state law also now calls for the tax rate to go down one-tenth of one percent for every $20 million of additional revenue from the online sales.
Noem said she’s not ready to go there. “The windfall is not there yet. That would not be fiscally conservative,” she said.
Among the changes from budget recommendations Daugaard made in the same chamber in December, Noem wants the Legislature to pay Medicaid providers more for the next 15 months rather than 12, with increases starting April 1 rather than July 1.
That’s one of the ways she wants to help nursing homes stay open.
Noem also wants respite care in people’s homes, to help give a break in taking care of senior citizens.
Methamphetamine would get attention on several levels. Noem proposed a $1.4 million one-time and $250,000 ongoing media campaign; a $700,000-plus life-skills program for middle schools; two additional meth-interdiction team members for the current four; and $2.1 million ongoing to expand meth treatment.
Noem also proposed a mental-health court for Minnehaha County at $490,000. She noted there are “a lot” of things that can be done that don’t require state spending, such as foster care.
Noem also proposed ongoing funding for schools to have care coordinators and spending $4.6 million to start the upgrade of state radio infrastructure, half of the $9.2 million eventual cost. Counties also need to start preparing, she said.
“We have room in this budget for this known future expense,” she said. “Let’s be ready to go in 2023.”
Noem said she is moving five FTEs from the state Agriculture Department to the Governor’s Office of Economic Development. On broadband, she said state employees are looking for rural areas that wouldn’t otherwise be reached, with $5 million available for improving service.
“This is only going to be the beginning,” she said.
Noem proposed $1 million in one-time funding for improving wildlife habitat on a matching basis with private partners. On predator control, she wants $250,000 to take down coyotes and other species. She also seeks $500,000 for a one-time partnership to better develop Palisades State Park.
The new budget calls for two more veterans’ services officers to assist the 70,000-plus armed-forces veterans in South Dakota. Noem reiterated her support for the South Dakota Veterans Cemetery planned on the north side of Sioux Falls.
For state government employees, Noem called for 2.5 percent salary increases, up from Daugaard’s 2.3 percent.
“May God bless the great state of South Dakota. Have a wonderful day,” Noem said to close her speech.