This interview originally aired on In the Moment on SDPB Radio.
In a recent column, Gov. Kristi Noem warned legislators that it's time to hunker down for the state budget.
Jonathan Ellis, co-founder of The Dakota Scout and our Dakota Political Junkie today, brings his analysis.
We talk about conservative spending, tax holidays and how the economy can impact politicians' approval ratings.
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Lori Walsh:
The 2024 South Dakota legislative session is out there on the horizon. Can you see it?
Jonathan Ellis:
It's November.
Lori Walsh:
It's November. There's some distance between us and the session, but politicians are already gearing up for it, and that includes Gov. Kristi Noem.
She recently fired off a press release titled "Buckle down and budget: Looking forward to the legislative session." And it focused on, of course, the budget.
Jonathan Ellis is a South Dakota journalist and co-founder of the independent newspaper, The Dakota Scout, and he's stopped by SDPB's Kirby Family Studio for our weekly Dakota Political Junkies chat.
Hey, welcome.
Jonathan Ellis:
I always love to stop by, and did I mention it's November?
Lori Walsh:
It's November.
Jonathan Ellis:
It's here. It's on the doorstep.
Lori Walsh:
It's here. Have you planned for Christmas and Thanksgiving?
Jonathan Ellis:
Okay, so we have an ad in this week's paper advertising Christmas trees at the apple orchard, and I'm like, "Christmas trees. We're getting there. It's getting real."
Lori Walsh:
I'm fine with it.
Jonathan Ellis:
Yeah, that's okay. I like to plan. If you tried to squeeze my planning into four weeks, I would not get everything done. So, I start early, and I don't do nearly as much as what other people do. I don't throw a party or anything.
But you do cook some food.
Lori Walsh:
I cook, I do some baking. Low-key, low-key, but it's the things in the community, honestly, that I like to do.
Jonathan Ellis:
Sure.
Lori Walsh:
It's the things like, okay, the lights are going to go up and the parades going. Those are the things that I like to participate in. And so, I just like to anticipate it.
Jonathan Ellis:
Agreed.
Lori Walsh:
Music.
Jonathan Ellis:
I'll pass on what we had last winter in terms of the amount of snow and everything, but yeah, bring it on. Bring it on.
Lori Walsh:
Yeah, I'm still tired from all that snow. I don't know if it'll be— I was going to say, I don't think it'll be as bad this year, but I don't know anything about how it'll be.
We do know a few things about how the budget address will be, because Gov. Kristi Noem has already said, "Hey, it's time to start working on this budget." She comes out strong with a critique of the national economy, which is not a surprise, but there's some things in a national economy that I think are worth digging into here.
First though, how did you read this press release and what kind of response have you been hearing from lawmakers? How they read it?
Jonathan Ellis:
It was a weekly column, and this is an interesting mode of communication that I think was pioneered by Sen. John Thune way back when he got elected. They started doing a weekly column that I'm sure Sen. John Thune is not sitting down and writing every week. But effective communication that goes out, and the weekly newspapers will print those.
And so, the other Republican candidates over the years have adopted that. This was her weekly column, and typically, there's not always a lot of meat on these things, but this one was one made a little news saying, for one thing, she wants to make this tax holiday that the legislature passed, a sales tax holiday, permanent. So, that was newsworthy.
I mean, that's not a surprise in that sense. She was for that back then, back in the last legislative session, but she's basically putting out a line in the sand on that tax holiday. And then she's warning lawmakers like, look, it's going to be lean again. We're used to being lean in South Dakota.
Lori Walsh:
Normal.
Jonathan Ellis:
Normal, and not really mentioning the fact that has been abnormal, thanks to billions of dollars of federal stimulus monies of various types.
Lori Walsh:
So, essentially she's saying, hey, the national economy is still tough. There's still inflation, but our budget is going to look more quote, "normal" than it has in the last several years. And then she lays out a few things about that. For people who don't remember, last legislative session, the big story was tax cuts. A potential property tax cut, which did not pass, and a potential food tax cut.
Jonathan Ellis:
That did not pass.
Lori Walsh:
It did not pass. And then this overall tax cut, which passed with a sunset clause. Now she's calling it a tax holiday, but that's not what we were calling it back in January. It was a tax cut that had a sunset clause so they could evaluate this very thing, which is the national economy. And the impact on the state over the next couple of years.
Jonathan Ellis:
Correct, correct.
So, a lot of lawmakers were in town. This column comes out at a time when a bunch of lawmakers who were not normally in Sioux Falls were here because of the governor's pheasant hunt. So, we talked to a lot of them, and she says in her column that there's already talk of repealing this tax holiday early, this tax cut.
Lori Walsh:
Are you going to go with the word holiday? Just broadly speaking, do you pick up the word holiday at this point? Or do you stick with sunset clause? Tax cut with sunset clause?
Jonathan Ellis:
Well, it's easier to just say holiday.
Lori Walsh:
That's what I'm asking you. Do you pick it up because it's easier or do you pick it up because that's how she sees it?
Jonathan Ellis:
They're both accurate.
Lori Walsh:
Yeah.
Jonathan Ellis:
Right. I mean, they're both accurate. And so, this tax cut with the sunset clause. She says in her column that there are already people, lawmakers, who are talking about repealing it early. I've heard no such talk. Now, I don't talk to all 105 lawmakers, but we talk to a pretty significant cross section of them pretty regularly. In fact, we're about ready to break some news at dakotascout.com here, talking to some lawmakers. So, check that out soon. But yeah, nobody that we've heard wants to repeal it early.
Within the state Senate, where you saw the opposition to making this a long-term or permanent tax cut, there are some senators who are like, "We don't want to mess with it at all. Let's just see what happens." We can always let the sunset go into effect, but within that body, my understanding is that there's really not a stomach to move. The status quo is fine for a lot of them.
Lori Walsh:
Yeah, we decided this. We spend a lot of time deciding it.
Jonathan Ellis:
We did.
Lori Walsh:
January to March.
Jonathan Ellis:
We did.
Lori Walsh:
But she is saying, "I'm already..."
Oh, wait, no. Where did she say this? She wants it to be a permanent tax cut. Is she declaring now that that is the thing that she's going to say, "I'm hopeful the legislators will make this tax cut permanent." Instead, they're already talking, which you say you haven't really heard, but she says there's some talk about repealing it.
Jonathan Ellis:
We had lawmakers who say there's absolutely no talk about that.
Lori Walsh:
Okay. Do you think that she is saying, "I'm going to ask at the budget address that you make this permanent and you make the permanent now."
Jonathan Ellis:
For sure she'll do that. And that's not a surprise. I mean, she went with it, but she criticized it. First off, of course, she wanted the entire sales tax removed from groceries. When she didn't get that, she went ahead with what the legislature gave her, but she was very critical of the fact that it wasn't a permanent tax cut.
Lori Walsh:
So, the governor is not saying, "I'm bringing the food tax conversation back to the table." This is what she's bringing back to the table, which is this is what you decide to now make it permanent.
Jonathan Ellis:
They'll make it permanent. Correct.
Lori Walsh:
They'll make it permanent.
Jonathan Ellis:
The food taxes is now its own entity as they attempt to get that on the ballot.
Lori Walsh:
So, do lawmakers listen to this idea of permanence at all?
Jonathan Ellis:
Oh, for sure.
Lori Walsh:
Or do they just say, you know what, this has already been decided. There's a sunset. No, we're not taking up this issue and making that central to our conversation.
Jonathan Ellis:
She'll have a huge amount of support for that among a lot of lawmakers. But again, especially in the House, this is where it's going to kind of bog down in the Senate where there's more of the, "Hey, let's see how things play out. Here's status quo. We got time. Time's on our side." But yeah, she will have plenty of support, no doubt about that.
Lori Walsh:
So, she also goes into this idea of many members of the state legislature that have not experienced the, quote, "normal budget year." I'm reading directly from the column. And then 51 of the 105 members have only been serving since 2020. So she's talking about how many of these?
Jonathan Ellis:
Thanks, term limits.
Lori Walsh:
That was my question. Is that unusual?
Jonathan Ellis:
We've seen a lot of turnover, and we're going to see more even in this next cycle of people who really experienced lawmakers who are done. They play the game of going from the House to the Senate to evade the turnover.
But yeah, we have seen and we are going to see more really veteran lawmakers. And that's saying something. I mean, the governor was in the legislature. Her first term was 2007. Now, we recall what happened. I mean, she has been in the trenches in the legislature when there was some real difficult decisions made.
Now, she was elected to Congress in 2010. At the same time, Daugaard comes into office. So, she wasn't in the legislature when Gov. Dennis Daugaard implemented 10% cuts across the board. But she was there. She saw the lead up to that, and so she knows what she saw. Use of reserves. I mean, she's been in the trenches when times were real tough.
Lori Walsh:
Yeah. I want to go back to something we didn't really dive into, but this idea of the national economy. So consumer confidence, five months, low, inflation improving, but in real life, it still seems like things are pretty expensive, so it's not reset to something that you would consider normal. On the other hand, jobs report 366,000 new jobs. The restaurant industry brings on 61,000 jobs. Restaurant industry is full force since pre-pandemic. GDP is expanded, we're looking at 4.9% growth in America. This is all defying predictions.
Jonathan Ellis:
There are a lot of caveats in those numbers though.
Lori Walsh:
What I'm really wondering is does she have the ground truthing of what this economy looks like for business leaders and workers in this state to carry, "Hey, the Biden administration has been so irresponsible. It's really impacting your lives. We got to do some hard things."
When it seems like the news on the national economy is mixed, and therefore it's really going to depend on what you're experiencing in your life. Certainly unemployment is low. Interest rates are not going to go up. It doesn't look like the Fed's about to meet. Is this a political talking point that you think still has legs or are those legs starting to get a little weaker?
Jonathan Ellis:
I have to look at the approval ratings of what I see with the president, and I would say that it's probably a talking point that still has plenty of currency, especially among Republicans. And this is a Republican state. So yes, now you can look at the numbers you're looking at, and they are mixed GDP. But some of that is because of, if you look deeper into those numbers, why? And you look deeper into the jobs reports. Why? Well, because more people are taking on second or third jobs. I mean, it's definitely, definitely mixed. I think.
Lori Walsh:
Yeah, that's why I'm asking the question. Because I think whether or not you like President Biden is not necessarily the reason why you might not like him, it might not be because of the economy.
Jonathan Ellis:
There are issues playing out in our foreign policy that have really opened a lot of people's eyes.
Lori Walsh:
But she's making a direct connection to his economic policy. And that's what I'm asking. The budget address we're talking about again.
Jonathan Ellis:
Politics.
Lori Walsh:
Yeah. Yeah. I'm just wondering if when people are feeling pretty good, how far that gets beyond raising money?
Jonathan Ellis:
The problem is, I don't think that the term Bidenomics, which that administration seems to be writing that term. I don't know that it's as popular as they think it is.
Lori Walsh:
Yeah. She doesn't use that here.
Jonathan Ellis:
She does not, does she?
Lori Walsh:
No. She uses extremist policies of the, "American national economy continues to tank because of extremist policies of the Biden administration." I mean, it's a column. It's political, but that's the question. Are we tanking?
Jonathan Ellis:
And I don't see it tanking right now. I mean, 2008, we were tanking, right? I mean, I remember that. Again, she was in the legislation. That was called tanking. The Great Recession. You had these investment banks going out of business, people losing money. That's not happening right now. And as you point out, I mean, there's some economists are saying that we've been predicting this recession. It's coming. It's coming, coming. Well, now some economists are saying, well, maybe it's not coming.
Lori Walsh:
Easing off. We're not feeling as strong about the recession right now that it's going to happen. It looks a little more rosy.
In fact, I even read one that was in the Wall Street Journal was like, this is the Goldilocks economy right here. It's just right. And I was like, "Really?"
Jonathan Ellis:
Interesting. Well, from a political point though, I mean it's politics. The column is politics and it's good politics in a Republican state.
Lori Walsh:
What happens in the legislative session, because a lot of these new lawmakers that have come in, we saw a very different session in 2023 than we saw in 2021, for example. And some of that is the turnover. What are you anticipating? Is there a budget fight? Is there something that's already on the horizon that says this is going to be the big— We are already going to say, is the tax cut permanent is going to be a conversation. It's going to be a topic. All the stuff from the summer studies, those are going to be all hot topics, long-term care, nursing care.
Jonathan Ellis:
Long-term care.
Lori Walsh:
Counties.
Jonathan Ellis:
County funding. All those would be big issues. I always like to paraphrase Rumsfeld like the known knowns and the— But they're always unknown knowns and known. I mean—
Lori Walsh:
Yeah, the unknown unknowns is what we will not know.
Jonathan Ellis:
So, there'll always be that. And we will go back to, I think the abortion issue on a social that kind of got skirted in this last session. I don't think it will this time.
Lori Walsh:
You think it's coming back.
Jonathan Ellis:
I think so.
Lori Walsh:
Why would it?
Jonathan Ellis:
Well, because I think there are some pro-life legislators who think that what South Dakota had in terms of very restrictive abortion before June 24, 2022, when Roe v. Wade was struck down, that that was better than what the alternative might be if something goes with the ballot. We've seen probably more than a half dozen ballot measures across the country now, and they've all been on the side of abortion rights, and that includes in some pretty conservative places like Kansas. And so there are some who, they may be pro-life, but they're not sort of, quote, "the absolutist" that all abortion in every instance has got to be illegal. And so I think that there might be some among them who say, let's look at the restrictions we had. I mean, abortion was pretty restrictive in this state, and it maybe even may make it more restrictive than that. But this absolutist policy among some of them, they think it'll be worse if it actually goes to the ballot.
Lori Walsh:
Yeah, that would be interesting to watch as well. Let's wrap up with something you've seen in our community. You mentioned international politics. Hamas' attack in Israel and the retaliation by the Israeli military in Gaza. We're watching all that unfold, humanitarian, just devastation. And you say there's some rising antisemitism in our communities. Say more about that?
Jonathan Ellis:
Well, I mean, not necessarily in Sioux Falls, but I mean, it's just in the nation. I am amazed at the level of just outright hostility to Jews that we've seen on college campuses, just the protests that we've seen. I'm shocked. I'm absolutely shocked. Now, the whole issue of Israel and Palestine and the Palestinians. I mean, there's a very complicated history there. I don't think you can say there's a right and wrong necessarily, but just I am really appalled at what I've seen in the last few weeks.
Lori Walsh:
Yeah. Do you want to leave anybody with anything else? We're going to go to dakotascout.com to look at some news that you're breaking. Any hints about that or just check it out this afternoon? What do you think?
Jonathan Ellis:
We'll have some news this afternoon. Our print edition is going to press here in the next hour or two. We'll have a story about the Veterans Affairs Inspector General report that came out. We have some other news coming about some decisions being made by the Sioux Falls Police Department that will be very controversial and even more. So, there'll be plenty.
Lori Walsh:
All right. Jonathan Ellis, thank you so much for being here. Appreciate it.
Jonathan Ellis:
Lori, thank you.
