This interview originally aired on "In the Moment" on SDPB Radio.
Seth Tupper, editor-in-chief of South Dakota Searchlight, joins us for a Dakota Political Junkies conversation and preview of the 2024 legislative session.
Gov. Kristi Noem laid out her budget proposal without mentioning how much she was asking for. We take a look at those numbers and the issues she may push for this session.
Plus, does the state need to do more to prevent the spread of the invasive zebra mussel through South Dakota waterways? One nonprofit says yes.
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Lori Walsh:
Well, the 2024 South Dakota State Legislative Session is kicking off next month. What can we expect from lawmakers this session? South Dakota Searchlight has made a few of their predictions based on Governor Kristi Noem's budget address last week. Teacher pay in particular might be one of those conversations we'll hear a lot about.
Seth Tupper is editor-in-chief of South Dakota Searchlight. He's our Dakota Political Junkie for the day and he's joining us from SDPB's Black Hills Surgical Hospital Studios in Rapid City. Seth, welcome back. Thanks for being here.
Seth Tupper:
Yeah, thanks for having me.
Lori Walsh:
As you went diving into the governor's speech, you noticed something that was rather interesting about how she presented it, which was how much is the budget now? What's the budget going to be when we get through the ... tell me a little bit about trying to figure out how to report on this and fill in some of the gaps.
Seth Tupper:
Yeah, well, I've covered enough budget addresses or edited enough stories from other people covering budget addresses to know that a funny thing happens at the budget address, which is that the governor doesn't always and quite often doesn't actually say how much the budget is. So in prepping my reporters to cover the budget address, I was sure to stress one thing we got to make sure we include, and this may sound silly, because of course she would include this, but how much is the budget?
Lori Walsh:
Yeah.
Seth Tupper:
She never said that in her speech. She never got around to a point when she said, "And here's the budget and here's how much it is in total." So, it's not that she doesn't disclose it.
Lori Walsh:
Right, yeah.
Seth Tupper:
They do a big document dump with the Bureau of Finance and Management and you have to go looking for it. There's a page that talks about the total budget with all the state funds and the federal funds and everything you add up. It adds up to over more than $7 billion, but it's just that during the speech, she never actually says, "And our budget for this year is $7 billion." She just talks about aspects and pieces of the budget that she wants to focus on.
Lori Walsh:
Yeah, so this goes ... and you and I could talk for a long time about you want to tell a good story in the budget address, but yet it really is a budget address and the facts might be a little dry, but that's okay. So I mean, I like the budget address and the slides and looking through the budget book, and it's still important work to do. What are some of the highlights that you noticed as you looked at her proposal, which of course is a proposal, not the final, but what stands out to you?
Seth Tupper:
Well, the teacher pay thing really jumped out to us, because about a week or two before the budget address one of our reporters covered this Teacher Compensation Review Board that the state has, that since the state passed a half cent sales tax increase, I think it was back in 2016, that was going to go toward raising teacher pay, this board ever since then has been reviewing what's been going on.
When our reporter listened to that latest board meeting and did some analysis in the numbers, we found out that really if you compare to inflation, teachers are behind today where they were back then. So we wrote that story a couple weeks before the budget address, and then we were surprised during the budget address when Governor Noem decided to specifically single out this issue. She said that during her tenure the state has increased funding for schools 26%, but teacher pay has been far behind that. According to what we were able to figure out, teacher pay has maybe increased about 10%, while state funding to schools has increased about 26%.
She said during the speech, her quote was, "Why would we continue to send money to school administrators and school boards when they don't pass it on to teachers?" That was interesting, because as you know, and anybody who's been around South Dakota long enough knows, I mean, we've been talking about teacher pay forever, right? I mean, we're perpetually 48th or 49th or 50th or whatever in the rankings of average teacher pay.
Here we've gone through several years where we had budget surpluses and we had more money than we knew what to do with in South Dakota, and we were looking for things to do with it, and we passed a sales tax decrease last year. Now finally in the year when the budget's tight and the federal pandemic aid has run out, now we're going to talk about teacher pay apparently. So it seems like we just can't ever get this timing right, but the governor didn't really specify in her budget address what she wants to do with teacher pay this year, but she indicated that she's working on it and working on some kind of way to address it, so we'll be interested to see what she comes forward with during the session.
Lori Walsh:
She's taking the stance of, I have sent you the money, prove to me that you're going to use it in a healthy way. She mentioned to lawmakers, "Hey, last year you spent way more than I wanted you to spend. I'm not going to just sign off on this again." So these sort of warnings to put her marker on the table, do you think they're legitimate? Do you think she has the political capital and the relationships needed to encourage lawmakers in school districts to move in the direction that she wants them to move?
Seth Tupper:
Well, unfortunately for her, I think some legislators come to view these kinds of threats or veiled threats from her as kind of like the boy who cried wolf, because if you remember during the last legislative session, she kind of vaguely threatened to veto the budget if the legislature didn't pass a repeal of the sales tax on food that she wanted.
Well, they called her bluff and they didn't pass that. They went with their own plan instead, which was to reduce the sales tax across the board temporarily, and they passed that and she signed the budget anyway. So when she issues threats like that, she's shown in the past that maybe she won't follow through on that threat. It doesn't mean she won't this year I guess, but I think that'll be on legislators' minds is perhaps they've heard language like this before and the threat didn't actually turn into action.
Lori Walsh:
Yeah. All right, so it's a decrease from the current budget, but the sales tax revenues are predicted to be up. Help me understand why you would bring a budget that was smaller, even when sales tax revenue is looking strong.
Seth Tupper:
Well, I think it's mostly about federal funds. During the pandemic, billions of dollars of federal funds came into South Dakota and every other state as successive rounds of legislation rolled out of Congress to prop up the economy and help people recover from the pandemic. We have a chart in our story on the budget that shows the relationship between federal funding and the state budget, and you'll see that there's a huge spike in the last few years from federal funding.
As Governor Noem mentioned during her address, I think she said there's about $130 million left from the last round of federal pandemic aid, and she's proposing to spend most of that on water projects. But once that's spent, then that'll be it, we'll be in the post-pandemic stimulus era. Without that extra money we're back to normal, and in normal years South Dakota's budgets are typically pretty tight, being a small state or rural state that depends a lot on federal funds.
Lori Walsh:
Yeah. All right, so the tax cut that you mentioned, it's kind of shifted into this idea of is it permanent or is it a tax holiday? She really wants it to be permanent, because her theory is if there's extra money, it needs to go back to the people of South Dakota. Are the people that you're talking to, have they noticed the tax relief at all? On the flip side of that, have we noticed the loss of revenue?
Seth Tupper:
I haven't heard anybody that has noticed the tax decrease. Correct me if I'm wrong, I think it's 30 cents every time you spend 100 bucks or something like that is what it amounts to, so it's very difficult to notice for people in their everyday spending. Has the state noticed it? I think that will be coming forward this year and next year and the following years.
Hasn't been much of an impact felt from the lost revenue at the state so far, 'cause again, the tax cut was supposed to amount to about $110 million I think, and as I just mentioned, we still have $130 million of federal pandemic aid laying around that we still have to spend. So not a huge impact yet, but in future years I think it will be.
This whole debate about whether to make it permanent or not is kind of goofy, because the legislature did put a sunset on that I think in 2027, but of course legislatures can always ... even if it was permanent, they could always repeal it. If it's temporary, they could always make it permanent. It's a decision they can make every year.
Lori Walsh:
So, 'cause when you're looking at the impact on people's lives, the food tax, you can make a strong argument about how the food tax is impacting people's lives, especially people with smaller incomes and dealing with more hardship, more economic hardship. Then the property tax, it's probably pretty easy to find some sources you could talk to about the difficulties of how the property tax is impacting their lives, but across the board tax, it becomes a little more challenging.
If you and I were just looking for someone to say, this is how it would impact me if that sunset and we no longer had this tax. It's hard to sort out, because this isn't just theoretically, this isn't just a political talking point. It's a powerful one, raising taxes, lowering taxes, I get that, but it's not just that. What do you make of that what I just said?
Seth Tupper:
Well, and you bring up an interesting point about property taxes that I key on, because there were a lot of competing proposals last year to lower different kinds of taxes, and one of them was property tax. Although I haven't heard anybody ever mention, gee, I've really noticed that I'm saving money on this sales tax cut, because it's such a small cut, I've heard many, many, many people complain about their property taxes going up in the last several years as home values have surged and the price of homes has surged, and interest rates have gone higher on mortgages and that kind of thing.
So, I was really surprised last year that the drive to do something to rein in property taxes didn't have more momentum and more support. Because I think if you ask the people of South Dakota and did a poll, a lot more of them would say, "I noticed that my property taxes are going higher," than would say, "I've noticed that I have a little bit of savings from the sales tax every so often."
Lori Walsh:
Yeah.
Seth Tupper:
I haven't heard any more movement on that front, but I just think that on the not too distant horizon, property tax will probably be a pretty big issue.
Lori Walsh:
Right. Which to be fair, the lawmakers, that's part of the reason why they put the sunset on there, so they would extend the amount of time to have this conversation, which was a productive conversation last year. I thought there was many times that we heard productive conversations anyway.
I want to make sure we get to something else that you recently wrote about Seth, which was this zebra mussel study and sort of the accusation that the state, and we talk about what you're spending money on. There are people who are saying the state is not taking seriously the mitigation of zebra mussels in our waterways. Tell me a little bit about that story.
Seth Tupper:
Yeah, so zebra mussels are these fingernail size mollusks that came over here apparently on boats from Europe and kind of accidentally slipped into our ecosystems in the United States, and since about 2015 they've been showing up in South Dakota lakes and rivers. They can do a lot of negative things, they can out compete other native species, they can attach to and clog up water intakes that are used for water systems, they can clog up the workings of the hydropower plants on the Missouri River dams and that kind of thing.
So a lot of people, especially people that live along lakes and rivers and do a lot of fishing and boating and things are worried about this. The state has been doing educational campaigns and basically checkpoints at state parks and state managed lakes and things to try to educate people to clean and dry their boats every time they take them out of the water, so that these zebra mussels don't hitch a ride into another lake when they go there.
But there are people, including the South Dakota Lakes and Streams Association, that thinks the state should be doing a lot more to try to stop the further spread of this invasive species. So, that association is the one that's raised money from various sources to do a study on the economic impact of zebra mussels. What they hope to do apparently is show the state that, look, when you add up the potential impacts to the hydropower on the dams and to water intakes and to recreation and all kinds of things, that this could be a big economic impact to the state. They hope to use that to pressure, I guess, Game, Fish, and Parks and state officials to do more to stop the spread of these mussels.
Lori Walsh:
All right, Seth Tupper, editor-in-chief of South Dakota Searchlight for our Dakota Political Junkies conversation today. Hey, we appreciate your time. We'll see you next time.
Seth Tupper:
Thank you.
