Noem’s budget address a yawner. Starts with over-embellishing our economy, goes flat with no fresh proposals.

Before laying out some of the spending plans in the state budget for the coming year, Gov. Noem spent a few minutes of her budget address two days ago touting the condition of our state’s economy and comparing it to the rest of the country. 

She began with the incorrect assertion that “this year inflation has risen.” 

Actually, the exact opposite is true. Inflation in 2023 has not risen. It has dropped dramatically. In 2022, the inflation rate was 8%. A significant decline began at the end of 2022, bringing the inflation rate for the last 12 months to 3.2%. 

Then, after thoroughly bungling her take on inflation, Noem came up with another whopper. She claimed that “our economy is one of the strongest in the nation,” which is also incorrect. At 0.5%, South Dakota’s GDP growth in 2022 ranked us at 39th. So far this year we aren’t anywhere close to being the strongest. After a strong showing in the 1st quarter of this year, we quickly dropped back to less than mediocre results. During the 2nd quarter of 2023 we had annualized growth at 1% compared to the national rate of 2.1%, a performance that put us into the 4th lowest quintile of states in the country. We may well pull higher by the end of the year, but based on what’s out there so far, Noem is way off when claiming we have a strong economy compared to the rest of the country.

Not only are we far from the “strongest economy in the nation,” we are among the 15 most federally-dependent states in the country when it comes to funding our government. About 40% of South Dakota’s general appropriations are paid for with federal funds, quite the repudiation of Noem’s long-held hostility to socialism, which, according to her, “destroys lives” and “is contrary to American values.”

So blithely does Noem ditch her hostility to socialism that one of her initiatives, the expansion of South Dakota’s Jobs for American Graduates, is dependent on “available federal dollars.” She won’t depend on homegrown South Dakota bucks to expand JAG, but federal money?  Well . . . I guess socialism is just fine when the money comes in handy.

There were other eye-catchers in her budget talk. For one, Noem seems to make it plain that she has abandoned her quest to remove the state sales tax on food purchases. The proposal, a centerpiece of her reelection campaign in 2022, never came up in her talk. Instead, she focused on the puny 0.2% state sales tax cut that she signed off on last year and says she’s hoping to extend this year because “it will ease the burden of inflation.” 

Wait, what? Ease the burden? Really? With that tax cut, on a $100.00 purchase you save all of 20 cents.

Some relief.

It’s kind of a joke, really, though I doubt that homemakers in grocery shopping aisles who thought they might get a break on food purchases are laughing very much over her broken commitment to give them some relief.

That she seems content with South Dakota’s status as the lowest paying state for teachers came through with her 4% increase in state funding for education. Our state's teachers need a lot more than that to close the salary gap between them and their peers in the rest of the country.  

At a mean salary of $49,190, South Dakota’s teachers are the lowest paid in the nation.

Gov. Kristi Noem completely ignored the matter in her budget address this week, complaining in her address that school districts haven’t been passing along funding increases. Asked the governor, “why should we continue to send money to school administrators and school boards when they do not pass it along to teachers?”

The question implies that she believes state funding increases should be dedicated to salary increases for teachers. Each district has its own set of priorities for how they spend money from the state, but even if South Dakota’s teachers did get the full 4% increase in funding from the state, their salaries would still be in the running for dead last in the country.

Overall, Noem’s budget seems utilitarian in the sense that it doesn’t seem to have much in the way of policy or political considerations. There was no discussion about tax reform in this, one of the most regressively taxed states in the country, and her commitment to infrastructure spending relies heavily on federal money. 

The South Dakota Democratic Party couldn’t find much in it to criticize. Dems complained that Noem should have inserted items that would “include free breakfast and lunches for our public school students, assistance for child care and accepting the federal government’s offer of a summer EBT program for families.”

Dems also pointed out that Noem “left out any reference to our tribal members,” a cogent point indeed, but one that doesn’t seem like it will get anyone particularly riled up, an observation that applies to Noem’s entire budget.  

John Tsitrian is a businessman and writer from the Black Hills.  He was a weekly columnist for the Rapid City Journal for 20 years.  His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald.  Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam.