All three candidates for governor want to cut the state sales tax on food, but increased costs in other areas of the state budget could make passing the proposal difficult.
Republican Gov. Kristi Noem said cutting the sales tax on food would reduce state revenue by $100 million dollars. Eliminating the food tax has been floated by state Democrats for years. Noem’s challenger, Rep. Jamie Smith, D-Sioux Falls, was the prime sponsor on a bill to do just that in 2021.
Ian Fury, spokesperson for Noem’s campaign said Noem is confident the proposal can fit into the budget.
“We’ve already been having conversations with individual legislators and are encouraged there are several who have already said—who were opposed to this in the past—that because of continued high inflation and continued strong revenues that their perspective has changed," Fury said. "That they think now is the time, that this is the right tax to cut for the people of South Dakota.”
One key senator wants to see more numbers before committing to the idea.
State Sen. Jean Hunhoff, R-Yankton, co-chairs the appropriations committee that sets the state budget. She's interested in opportunities to reduce taxes, but is not ready to decide.
“Because we have to have more projections and more facts that need to be considered during this upcoming session," Hunhoff said. "So, with that said, this is an idea coming from the governor’s office. She certainly has that right to do that and put that out there. As an appropriator, I need to see the big picture. The total picture that we’re going to be looking at.”
Voters could pass Medicaid expansion. Lawmakers also anticipate higher costs for recently approved building projects, new prisons and possible property tax relief.
The appropriations committee is scheduled to meet again November 10.
