MADISON–Going into the 2023 Legislative Session, a top priority for lawmakers was delivering tax relief for South Dakotans. After weeks of debate and negotiations, I am proud of the House and Senate for coming together and passing the largest tax relief package in state history–$104 million.
South Dakota’s economy has been incredibly strong, especially in recent years. After consecutive years of surplus tax dollars, it was time for lawmakers to consider tax reduction. The Senate took a cautious conservative approach to its consideration of three proposals–elimination of the sales tax on groceries, reduction in property tax, or a decrease in the overall sales and use tax rate.
Ultimately, the Legislature reduced the sales and use tax rate from 4.5 to 4.2 percent. This tax cut is a major victory for the people of South Dakota, and I am proud of my colleagues for working together toward a common goal of protecting South Dakota’s economy, but more importantly, looking out for your pocketbook.
South Dakota is a fiscally conservative state. We balance our budget and meet our obligations to serve our residents. National economic pressures as a consequence of Democrats in Washington, D.C., have caused concern amongst many of a recession or reduction in economic growth. Additionally, in four years the one-time federal ARPA dollars will have fully cycled through the economy and we will have a clearer understanding of the real cost of Medicaid expansion. While Lawmakers don’t have a crystal ball to see the future, we do look at trends in the economy and listen to the experts. No one knows if the recent surpluses are the new normal or the result of inflation and the influx of federal dollars related to COVID relief.
Because of these concerns, the sales tax cut has a four-year sunset clause, which allows legislators to revisit tax cuts in the future. Simply put, with the artificial federal stimulus dollars still impacting our economy, it’s fiscally irresponsible to reduce taxes without a trigger or insurance plan if the economy takes a turn for the worse. In the end, only the Democrat leader and assistant leader in the Senate disagreed and the rest of the Legislature approved the largest tax cut in South Dakota history after months of careful debate. This tax cut represents sound fiscal policy as we will not tie the sustainability of South Dakota’s budget to Democrats’ policies in D.C.
At this time, a tax cut with a sunset clause is prudent. It’s an insurance plan. Being a fiscal conservative doesn’t mean we attempt to get tax rates down to zero percent, but rather only taking what we need from taxpayers and doing the very best with the dollars we collect. South Dakota is a low tax, small government state, and we will continue to operate that way under conservative, Republican leadership in the South Dakota Legislature.
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A tax cut that will benefit the wealthy more than the poor. I guess they had to give their donors something in return. SD is showing their corruption.
The poor already have the tax free SNAP program. Getting rid of grocery tax does them no good. With this plan, they will receive some tax relief on other products.
SNAP is a supplement to groceries. How about the middle blue collar class?
Anonymous at 6:40 p.m…. Tax cuts mostly benefit people who pay taxes. The people who pay taxes are by definition wealthier than those who don’t. A tax cut for me doesn’t hurt in any meaningful sense those who don’t pay much in taxes.
And if a tax cut benefits farmers and ranchers most of all, bravo! They are the chief drivers of South Dakota’s economy. Also, I like food, and wealthy producers are much better than poor producers at growing food.
A major tax cut would have been the total elimination of sales tax on food. This would help all the citizens. We are only one of seven states that taxes food.
food is a necessity, many of the other items taxed are not necessities, but luxuries.
You mean like clothes and electricity?
Yup you got it. Lorraine you are 100% correct.
Your argument is self-defeating on so many levels. In 2016, were you praising the legislature for passing a half-cent sales tax increase because it would disproportionately hit the rich? Can’t have it both ways. If this benefits the rich, just imagine how much of the over-taxation has come out of their pockets! You leftists just can’t wait to stake out victimhood status.
And the poorest of the poor aren’t charged tax on food when they use taxpayers money to put food on their tables. And the next poorest class of people didn’t take advantage of the SD food tax refund program when Rounds enacted it. So save your crocodile tears. Everybody wins. Everybody gets to keep more of the money he earns.
Governor Noem disagrees with you.
We almost had no tax cut because of the Senate. Now we have a sunset that we’ll have to fight to get repealed. Bad leadership from the Senate. We can only hope that they pass actual permanent tax relief in the future.
The Senate has poor leadership. The worst in years.
What happened to youngberg? He was a man of the people.
No doubt. Best district 8 has produced.
Who would win JY or CC?
LH
Seems prudent to me.
Too bad we didn’t hear this on Tucker Carlson!
No mention of the increased cost when medicaid expansion kicks in and the federal money for it decreases. Bye bye tax cuts.
If you make $75,000 annually and spend it all in South Dakota on taxable items this cut in taxes will save you $225. It’s not going to change anyones life yet it is a much larger amount than the elimination of sales tax on food would have provided.
On the macro side of it by leaving $104M in the economy it will actually spur a higher GSP than would have been possible having it swallowed up by government.
If your math is right Charlie, I can only go to B & G once a week with this deal. I guess the Senate plan would have been better. I do like B & G ice cream!
Bryce I believe them to be true therefore they are. 🙃 The best deflector for taxation ever invented though was the lottery gaming machine..that hummer sucks $380,000 a day only out of peoples back pockets who play.
Charlie, that would be a voluntary tax, no?
Charlie, do you know many people making way over the state average who doesn’t have to pay living expenses, insurance, etc.? They just blow every penny buying consumer stuff? Not very fiscally conservative.
“Saving” a few hundred bucks in 4 years isn’t squat, compared to the $500+ a year the grocery tax elimination could have provided.
Patting yourself on the back for saving the super high spenders a pittance is peak SD.
Anonymous 8:25am
Charlie isn’t a legislator anymore. He doesn’t vote on this.
promise fulfilled? The Partridge Amendment was a promise broken
SMH
Exactly. Legislators don’t care about promises. Only what fills their campaign accounts. Big money donors don’t care about the grocery tax. They spend far more buying things than on groceries.
These legislators do not represent their constituents. We need to wake up as a state and replace them. They are there to support their own delusions and ideas, and not our best interests. This will be shown again when we vote for the food tax repeal, and they over-ride the will of the people the following session or take it to their SD courtroom. They get elected by calling the other people “democrats”, not for their capabilities or skills.
Until people wake up and realize that the other party is not the source of all their problems (shocking that they still get blamed for everything with only 8 democrats in all of the state), this will go on. Checks and balances are not a bad thing.
the ‘other party’ as you put it should accept a share of the blame for the way governance happens in this state. a hands-off lack of any effort to be part of the system is what we expect of libertarians dedicated to losing rather than compromise. for democrats to want loser-purity rather than fight to compete for voters based on what voters want in terms of service, is just a fail on every level.
I can agree with that, I don’t feel any “party” has all the answers. However, this issue lies with the voting public, elected officials at a federal level have roughly a 20% approval rating over the years, but an 88% re-election rate. I don’t have the stats for South Dakota, but you get what you vote for, and this is what we get. It reminds me of a line from a classic film, who can guess it?
“What we’ve got here is failure to communicate, some men you just can’t reach….which is the way he wants it, well he gets it, I don’t like it anymore than you men”
My, how the proud ‘party of Lincoln’ has corroded into the ‘party of hate and retribution and “Golden Calf” (trump, Maga) adoration.
Noem needs to veto this tax cut. Yes, they will override it. The vast majority of people will save peanuts on this cut. The people saving the most aren’t even people – they are companies incurring sales tax on large development projects or vehicles or expensive services. So the shareholders of those companies will do marginally better. Those of us not buying a $100k car or building a house, will save peanuts.
I wasn’t a huge fan of the proposed cut on groceries but it’s way better, has way more impact on families, and is more fair to all the people of our state.
Noem should veto. No question. Show them she’s serious. Show them who has the power.
Anything less than a veto she’ll look like a fraud that used the grocery tax to win.
Wasn’t the partridge amendment supposed to be the sunset clause in place. That didn’t get adhered too. But this one will. Watch and see.
“South Dakota is a low tax” @SDGOP let’s raise them. More money to spend.
Keeping Promises, cutting the tax all the way back
This isn’t an insurance plan. If you want to raise taxes in 4 years you’ll have to take a vote. This way you have an easy way out.
Crabtree really thinks we are all buffoons with this press release. Anyone should be able to see right through it.
Senator Crabtree has taken the class on spinning the narrative. If he wanted to show political courage he would’ve worked towards repealing the tax completely as called for in the PA. In 4 years they could bring a bill to tax the citizens again if there was a need. Putting our tax dollars in a fund is theft. It’s theft of freedoms of what the citizens do with their money and putting it in a pot for the state. This is the definition of legalized theft. Our state’s constitution requires that we have a balanced budget. I do not believe the founding fathers intent was to take money from the people that was not needed. The fact that we have a budget surplus goes against our constitution and against the requirement of taxes. Every dollar that goes into the reserve is absolute theft. Taxes were intended to keep a small and lean government going. We have a lot of pork in SD politics.