Noem announces difficult year for state economy during FY2021 budget address

Dec 3, 2019

Gov. Kristi Noem addresses state representatives during her budget address for fiscal year 2021
Credit State of South Dakota

Gov. Kristi Noem delivered the 2021 budget address on Tuesday, Dec. 3, noting that the proposed budget reflects a difficult financial year.

“As you probably already suspect, money is tight this year,” Noem said to house representatives.

Ahead of the address, Noem announced a $9 million reduction to state agencies. There are no inflationary increases for education or state employees.

The proposed 2021 budget is $28 million higher than the proposed adjusted budget for 2020.

Noem’s address focused on South Dakota families by investing in state radio infrastructure, “next generation” industries, disaster relief, education and meth treatment.

Noem briefly stated the outlook for agriculture is uncertain for 2020.

She proposes a state sales tax of 4.5 percent. The tax accounts for roughly 63 percent of the state’s ongoing revenues.

With the Internet Tax Freedom Forever Act signed in 2016, Noem projects South Dakota taxpayers to gain $30 million in tax relief next year.

$22.7 million in one-time revenue for FY2020 are available to spend this year.

Noem recommends sending a one-time $5.1 million investment in the state radio system for infrastructure upgrades.

She promotes $5 million in development grants for the Connect South Dakota initiative—efforts to implement a 5G internet service across South Dakota.

The governor’s proposed budget also includes one-time investments for state schools.

The University of South Dakota will receive $5 million for the construction of a new health services building. Dakota State University also receives $396,000 for an incubator and entrepreneurial center.

The budget includes $2,514,278 for disaster relief, with the state working with local governments to provide relief for current disasters and mitigate future ones.

“Local governments have highlighted their cash flow concerns with high dollar repairs,” Noem said. “To answer this need, starting with the 2019 disasters, we will now offer loans to cities, counties, townships and tribes from the Emergency Disaster Fund. The state will continue to pay 10 percent of the cost of the disasters but now will offer loans for the other 90 percent.”

Noem plans to increase enrollment in general and special education in the goal of supporting education. This includes funding for increased enrollment in public K-12 schools.

There’s an increase of nearly $14 million in total special education funds for schools. The special education funds are allocated in a rebase under six disability categories, which is calculated to take effect in the next fiscal year.

Noem proposes $3.7 million for intensive meth treatment and enforcement in continuation of her anti-meth campaign.

“In South Dakota, twice as many 12 to 17-year-olds reported using meth in the last year, as compared to the national average,” she said. “Not only does it devastate our families, but it also cost our state millions and millions and millions of dollars each year.”

This announcement follows a nearly half-million-dollar state campaign to draw awareness to meth addiction.

More specific budget numbers can be found on https://open.sd.gov