IM28 Requires Cuts to Schools and Nursing Homes
by House Majority Leader Will Mortenson (R-Fort Pierre)
and Senate Majority Leader Casey Crabtree (R-Madison)
September 25, 2024
In November, South Dakotans will decide whether to adopt a measure that would have a massive impact on the state budget and all who rely on it. Initiated Measure 28 (IM28) would repeal taxes on tobacco, food, toothpaste, and everything else that humans consume. It would reduce state funding by at least $176 Million with no replacement revenue, meaning it would require the state to cut at least $176 Million.
Balancing the budget is something we take seriously in South Dakota – our constitution requires it. IM28 does not include any plan to pay for itself; it simply eliminates revenue. Less revenue coming in must be accounted for somewhere, that is simple math and common sense. In South Dakota, we don’t use one-time money for ongoing expenses. Our budget must be truly balanced, with no gimmicks.
And we aren’t going to raise taxes. We need to honor the will of the voters. If the voters approve IM28, it would be bizarre to say that the will of the voters is to raise another tax. If the people had wanted to switch one tax for another one, they would have proposed that. Instead, IM28 contains a large revenue reduction with no replacement.
So – if IM28 passes, we will need to reduce state spending by at least $176 Million. Before going to vote, South Dakotans deserve to know what those cuts will mean. The state budget is comprised of four main buckets: Education, Medicaid, Public Safety, and Everything Else. Education accounts for approximately 45% of the general fund budget. Medicaid, which funds nursing homes, hospitals, and other care providers, is about 35%. Public Safety, which includes prisons, courts, and law enforcement, makes up 15% or so. Everything Else is about 5% of the state budget.
| Category | Approximate Expense |
| Education | 45% ($1.05 Billion) |
| Medicaid | 35% ($800 Million) |
| Public Safety | 15% ($350 Million) |
| Everything Else | 5% ($150 Million) |
Each 1% of the state budget costs about $25 Million. Based on the size of the reduction proposed in IM28, we would need to cut at least 7% across-the-board. We are hopeful to have 2% or 3% growth in revenues this year, which would reduce the cuts to about 5%. So, if IM28 passes and the state has strong revenue growth, the minimum cut that South Dakotans should expect for schools and nursing homes would be about 5%. If revenues weaken, of course, the cuts could be larger.
We believe this is among the most irresponsible measures ever put before the voters. Every South Dakotan who runs a household, business, or organization knows that you don’t just cut revenue with no plan. That is a recipe for disaster. Yet, that is what has been proposed in IM28. The Democratic Party recently endorsed cutting schools and nursing homes through this plan, showing their party bosses stand for deficits and irresponsible budgeting. IM28 would be flat-out harmful to South Dakota. We strongly urge a ‘No’ vote.
However, if IM28 passes, we will respect the will of the voters. If they decide to cut revenues and expenses by passing IM28, we will honor their decision. We will not allow South Dakota to fall into deficits and debt. And we will not raise taxes. If IM28 passes, we will take our direction from the voters: reduce revenues and cut spending on schools, nursing homes, public safety, and everything else.
I had no idea anyone in Pierre understood the idea of reducing state spending. If this is a way to make them realize the option, then I will be VOTING YES ON IM 28!
Thanks, Casey and Will!
You are an absolute moron. You completely missed what they said. Fricken idiots everywhere
Where is the governor on all of these measures?
In the checkout line trying to look relatable.
Everyone loves to use the “cut spending” line when election season rolls around, but no one ever seems to know where the cuts should be made. Do you have any suggestions on where we need to reduce spending? Education? Law enforcement? Long-term care? If you have any tangible ways to reduce state spending, I am all ears! Until then, I’m going to have to say no to this fiscally irresponsible measure.
Prison……
This is laughable. Once again, the legislature has failed to act on a popular policy – eliminating the grocery tax. Due to the legislatures failure, the voters are taking matters into their own hands. They can’t stomach this, so they’re making outlandish claims to make people think it’s the end of the world – but it’s not. In addition to their numbers being inflated, the legislature will have ample opportunity to define in statute what is meant by ‘consumable goods’. Additionally, SD runs on an approximately $90,000,000 surplus every year. Why are they so scared to put that money back in the pockets of taxpayers?
If this measure passes, what impact will this have on the sunset clause of the State Sales Tax that is set to expire in 2026? It’s seem with talk of possible state income tax if IM28 passed, that this has now been place in the back burner. Legislature will have to address the sunset clause during the next session.
IM28, if passed, a great way to have a state income tax. What a great way to ruin our great state.
Most of these issues require leadership.
I commend mortenson and Crabtree for taking a position. It doesn’t matter if we all agree with them.
Noem ran to be governor. She has shown little interest in weighing in on G, H, 28, 29… I’m sure there are more. And when I say weighing on I mean weighing in of consequence not a statement.
I’ll sign a petition to remove the income tax. If we pass enough measures, eventually these legislators will be forced to work for us instead of those donors and their “scorecards”.
Like +1
The bulk of the loss will be made up by an increase in the general sales tax essentially negating any savings by the consumer. Clothing and other goods will be next slowly but surely pushing us to the acceptance that an income tax would be the most fair for those rich folks. It’s immoral to tax anything that’s essential right? If you are making money you can pay the tax. The rest of us on the struggle bus will be so much better off and we can live like those rich people who live in income tax states!!
Thanks for clearly stating that the “this will lead to an income tax” folks like Paul T are full of it.
However, “Initiated Measure 28 (IM28) would repeal taxes on tobacco” needs a cite. You’re stating that it’s a fact and it is not.
Chewing tobacco goes in your mouth. Smoking tobacco goes in your lungs. It is consumed by the person using it. Not rocket science.
If IM 28 passes the smokers and smoke shops will love it!
Tokers too!
SDCL 34-43-1(7) defines “tobacco product” as follows:
(7) “Tobacco product,” any item made of tobacco intended for human consumption, including cigarettes, cigars, pipe tobacco, and smokeless tobacco, and vapor products as defined in § 34-46-20;
See that phrase “intended for human consumption”? Same exact language as IM28. Pretty hard to argue tobacco wouldn’t be exempt from taxation if the measure passes.
Colorado passed an initiative measure making it so the legislature can’t raise taxes without the vote of the people.
This will help the smokers. It is an expensive hobby.
These 2 legislators are blowing smoke. The fact is that LRC’s fiscal impact statement required for all ballot measures found a revenue reduction of a little under $124M per year beginning July 1, 2025 if IM 28 is approved by the voters. The most recent year for which we have complete data (FY 2023) shows that the State collected about $1.47B in total sales and use taxes. There is no indication where Mort-Tree obtained their estimate of “at least $175M”, but it’s obviously not LRC. It’s important to use real data if you want people to take your argument seriously. And the claim that Democrats “endorsed cutting schools and nursing homes” is pure fiction. We should expect better from our leaders.
Read again. This Council of Research messed up their numbers and came out with new ones. Read the memo and weep for Mr. Weiland’s ignorance.
“According to a memo to be presented to the Joint Committee on Appropriations on July 30, 2024, the LRC estimates that IM-28 could negatively impact South Dakota’s state budget by up to $646.2 million for the 2025 Fiscal Year. This amount represents 46.5 percent of the state’s sales tax revenue and 100 percent of tobacco tax revenues.”
https://www.mykxlg.com/news/state/south-dakota-legislative-research-council-releases-updated-fiscal-impact-estimate-for-im-28/article_7788088e-4e07-11ef-87bd-ff6a0ac134db.html#:~:text=According%20to%20a%20memo%20to,for%20the%202025%20Fiscal%20Year.
Clearly Mort & Crabtree are just dealing with the facts, whereas the democrats are using magical thinking.
Those damn Dems, again, they must be in such a majority in the state. How can we slow them down? Almost 5% of our elected officials are Dems, we must stop them!
A well known Dem ran this IM
Who’s voting for it then?
To me this is a complaint editorial. The people elect them to solve problems. This could be a problem. How about plan ahead instead of complaining?
This sounds like a plan
Another problem Republicans created because they are dysfunctional.
Hmmmm…what was the Governor’s plan to pay for elimination of the food tax when she proposed it to help her limping re-election campaign? Even though her zeal dropped significantly after winning that close election, I’d say let’s do it however it was that she proposed. And if part of that involves raising the general sales tax to the prior level, that’s fine.
The legislature will fully define the meaning of what specific items are “for human consumption”, there is zero doubt about that. Likewise after Amendment G passes, the legislature will promptly re-enact the same abortion restrictions that currently exist during the 2nd and 3rd trimesters. No doubt whatsoever about that fact either. 🙂
If Amendment G is passed by the voters, the state legislators cannot re-enact restrictions on abortions or make new ones because the Constitutional Amendment is supreme over law.
The opponents keep misleading the voter. They are just going to repeal the reduction they made a couple of years ago. Net result would only be a slight decease and low income citizens would get the 4.5 break on food purchases instead the those making big purchases of equipment and other such items.
Exactly. It’s the same reason why Noem settled on the small sales tax decrease. It saved like $50 for the average household while saving the wealthy much more on their purchases. Raise the sales tax on all items outside of necessities and the working class would still be better off.
You spend more you save more. You spend less you save less. Please explain how any other form of tax cut is more fair, unless you’re trying to redistribute income.