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Politics

Noem 'not comfortable' with lawmakers' revenue projections

Governor Kristi Noem says she is not comfortable with revenue projections set by state lawmakers.

Their estimate for next year is $92 million higher than hers.

Noem says those crafting the state budget need to make wise decisions for the future. She says the state is facing upcoming challenges.

“I am not comfortable with what revenue projections are,” Noem says. “I’m encouraging them to be more realistic in what we could see in our future. If you look at the inflation costs and across the country, goods and supplies that are increasing every day for families here in South Dakota, we recognize our economy is not going to be as strong as it is here today.”

Others opposed to the budget projections are worried about the impact of ongoing drouth on farmers and ranchers.

Noem says the state also has some big budget items it needs to fund.

A recent prison study estimates the state Department of Corrections needs $600 million in new infrastructure. Polling indicates large support for Medicaid expansion in the state. That could cost the state $33 million annually. The federal government will match those dollars 9 to 1.

That frustrates a Democratic state senator, who says the governor wants it both ways.

“On one hand she keeps touting how strong the economy is, keeping everything open, what fast growth we have. But when it comes to revenue estimates, she suddenly changes.”

That’s Reynold Nesiba, who is also an economics professor at Augustana University in Sioux Falls. He says the Legislature's budget committee under-projected revenues by an additional $50 million.

“We glanced at some of the earlier numbers that happened the last time we had inflation this high back in the 1980s. What you saw was revenue growth of about 10 percent,” Nesiba says. “That in a time of inflation with a state that relies so much on a really broad-based sales tax, we’re going to see increased revenues simply from inflation, let alone from this growing economy.”

Nesiba says various state and federally funded infrastructure projects will create jobs and revenue for years to come.