Governor Noem

Kristi Noem strongly opposes the legalization of marijuana, medical or recreational. 

South Dakota’s financial position is “even stronger” — $125 million stronger — than was previously projected during the State of the State address, according to Gov. Kristi Noem said during a special address to the Legislature at the State Capitol in Pierre on Tuesday.

The state continues to see increasing revenue numbers above the projections Noem shared with the Legislature in December. There was an 11% growth in the state’s ongoing revenue this year, while officials project $8.6 million in ongoing revenue during fiscal year 2022, on top of the previously reported amount of $61 million.

For fiscal year 2021, the officials are forecasting around $51.5 million in one-time revenue, which Noem said was above her recommended budget.

“When you account for changes in taxes and fees, the state has likely never seen this kind of growth in its ongoing revenue. We looked back 30 years and believe this is unprecedented,” Noem said.

The one-year extension of the CARES Act funding for COVID-19 relief gives the state another $74 million to use in one-time funds. Noem said the extension of the funding means the state can plan to use $25 million of the Coronavirus Relief Funds (CRF) for the extension of broadband internet statewide and only use $75 million from the state general fund for the project.

“To summarize, between the $51 million in one-time revenues and the additional $74 from CRF flexibilities, we could have approximately $125 million in one-time money that we were not previously anticipating,” Noem said.

Noem reminded legislators that this situation will likely not last, while telling the Republican-dominated Legislature to stay true to their conservative ideals when deciding how to appropriate the extra funding. She discussed putting part of the money into savings and investing it into longer term projects.

“Remember, not long after the 2008 financial crisis and the resulting federal stimulus funding, our state faced 10% budget cuts to make ends meet. With that recent historical context in mind, we must remain disciplined and save for the future, whatever it may look like,” Noem said. “The fiscal policies that we are seeing from the federal government are not sustainable. South Dakota needs to be prepared for whatever may come.”

She proposed putting $50 million into the state’s trust funds in December and reiterated that proposal, saying since 2001 the trust funds’ annual proceeds grew by 350% to $43 million.

“This is how we set the state up for long-term success. It is important to remember what this number represents. In the past, we have invested money by putting it into trust funds, and today, we have an additional $43 million that we do not take from our people in taxes,” Noem said.

She cited investing in infrastructure projects that would benefit South Dakotans well into the future, such as expanding broadband, repairing dams, purchasing new radio tower equipment, setting up a needs-based scholarship endowment, purchasing a new state aircraft, and building a new Dakota Events Complex in Huron.

“I’ve told you many times that my mission is to make South Dakota safer, stronger, and healthier for our kids and grandkids. To do that, we need to take this perspective: whatever action we take with this money needs to fix something for 20 to 30 years or longer,” Noem said.

“In short, we need to view our budget as an opportunity to invest in infrastructure, cut long-term expenses, and bolster our savings and investments,” she added.

Noem ended her address by saying the state’s good position is due to the fact South Dakota respects its people’s freedom, personal responsibility, and conservative government.

“Our state motto: “Under God, the people rule,” is an important reminder for all of us here today. Let’s leave this chamber as responsible stewards of the hard-earned taxpayer dollars of the people of South Dakota,” Noem said.

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