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Lawmakers Concerned About Revenue Ahead Of Budget Address

SD State Capitol
Cara Hetland
SD State Capitol

Some state lawmakers are expecting a lean budget proposal from Governor Kristi Noem.

With wide-spread flooding across the state and a varied tourism season—the state’s two biggest industries—they don’t expect a lot of money to fight over. That, on top of losing a steady stream of revenue.

The state relies heavily on sales tax revenue, and when the two industries that make up a lot of the state’s economy are down -- lawmakers don’t expect big changes to the budget.

Republican State Representative Lee Qualm is the house majority leader. He says he’s concerned about revenue.

“We’ve been hit so hard by flooding in this whole state and we’re an ag state,” Qualm says. “Regardless of what any one else thinks, we are ag. We had the largest amount of prevent plant acres in the United States. Almost a third of prevent plant acres were in South Dakota. So, that really says what it is. Farmers are not out spending a lot of money. That will have an impact on our sales tax revenues.”

One state lawmaker says revenues coming in for this year are on track, but he says he’s concerned about next fiscal year.

Democratic State Senator Reynold Nesiba sits on the appropriations committee. He says they’re seeing some softness in agriculture. He points to another stream of revenue the state will lose next fiscal year… a tax on telecommunications.

“I’ve seen estimates of that between 10 to 20 million dollars and how to figure out that replacement revenue,” Nesiba says. “We’re still talking about what gets referred to as the Partridge Amendment or the Nesiba Amendment, which is that, if at some trigger level revenues generated from online sales, should we cut the overall sales tax rate by one tenth of one percent or should we take a full percentage point off the sales tax of food.”

Governor Noem gives her budget address at 1 PM central.