Gov. Kristi Noem says of the three large tax cuts being considered by state lawmakers, she's focused on one.
The second-term Republican governor wants to remove the state sales tax on food.
Noem said the tax cut she’s passionate about is obvious.
“If we cut the sales tax and repeal it on grocery items it helps every single family in this state,” Noem said. “It’s not us picking winners and losers and who gets the benefit of a tax cut and who doesn’t. I want every single family here to keep more of their hard-earned money.”
She hopes the legislature agrees.
Noem said in just seven months state revenue collections for Fiscal Year 2023 are up by $165 million more than what the legislature anticipated.
There is concern about the long-term sustainability of permanently removing $100 million from the state general fund.
There’s a large appetite to cut taxes this year in the legislature. The food tax cut proposal is sitting in appropriations. Another proposal would cut the overall sales tax by half a percent. That could result in a roughly $170 million cut.
“When we look at economic viability and responsibility the best option on the table right now in this legislative session is repealing the sales tax on grocery story items,” Noem said.
Senate Republicans are signaling their support for exempting the first $100,000 valuation on owner occupied dwellings. They say that savings will go directly to South Dakota residents.
Noem said she’d rather see the tax cut directed elsewhere.
“I just don’t understand why they only want to help certain people and not the rest of the families in the state,” Noem said. “That only helps the wealthier individuals that own property in the state. So, if you’ve got a single mom our there renting an apartment trying to put food on the table for her kids, that brings her no relief whatsoever.”
Noem said lawmakers should also consider efforts to place a food tax repeal on the 2024 ballot.
The chair of House Appropriations says the committee will debate the three tax proposals after the full appropriations committee sets a budget benchmark on Feb. 15.
To hear SDPB's full interview with Gov. Noem on tax cut proposals click play below.
