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Terwilliger: Nothing Cheery in Revenue, Economic Outlook

The South Dakota Council of Economic Advisors has no good news for our state revenue projections. According to Secretary of Revenue Jim Terwilliger, predictions of a big windfall from online sales tax collections included some wind, and the new federal ban on taxes on Internet service will make our net revenue gains fall further:

Unclear what Revenue Secretary Jim Terwilliger is smiling about....
Unclear what Revenue Secretary Jim Terwilliger is smiling about….

South Dakota’s state government will lose $20 million or more next July when a federal law takes full effect.

Congress has banned states and local governments from collecting sales taxes on internet services.

South Dakota is one of the remaining states where the services are still taxed.

…Terwilliger said he now expects the impact to be $20 million to $25 million.

That’s up from his previous estimate of $15 million to $20 million.

Meanwhile the financial effect from South Dakota’s victory in the Wayfair case remains less than many expected.

…Terwilliger said South Dakota’s state treasury has seen an additional $1 million to $3 million per month through new state laws taxing remote sales and third-party marketplaces [Bob Mercer, “Revenue Head Tells Council South Dakota’s Government Will Lose $20 Million of Taxes,” KELO-TV, 2019.08.20].

Furthering dimming our fiscal outlook are the actions the Trump Administration has taken to destabilize the economy and drive us toward the kind of recession that even Trump appears to expect and has said in the past he sees as a business opportunity:

“Us — our group as a whole — is probably a little bit more pessimistic than we were in the last meeting, which was in May, and certainly more pessimistic than we were when we met in January or February,” Terwilliger told the group.

He continued: “And with all the uncertainty going on with the tariffs and trade policy — and the ag sector, we think, is certainly going to be a drag on our growth, certainly through the second half of 2019 going into 2020 — I mean, who knows? — kind of a wild card — but I would say that we have to be cautious [Mercer, 2019.08.20].

Uff da—if this keeps up, Governor Kristi Noem might have to reduce skunk-tail bounties from $10 to $9 next year.

Do you remember the good old days, when conservatives criticized the President for creating economic uncertainty? Now they just awkwardly shrug and hope we forget their atrocious, self-serving record on economic policy while we struggle to fund our schools and roads.

12 Comments

  1. jerry 2019-08-21

    The trump recession spoken by trump kiddo’s to rich donors. China already knows this and that is why they keep kicking our arse’s. Brace yourselves.

    “In public, President Donald Trump and top White House officials keep extolling the strength of the U.S. economy. In private, they’re increasingly worrying about a global economic slowdown triggering a U.S. recession — and weighing options to shore up the economy ahead of an election year.

    At a fundraising luncheon this week in Jackson, Wyo., headlined by both Jared Kushner and Ivanka Trump, acting White House chief of staff Mick Mulvaney acknowledged the risks to the GOP elite behind closed doors. If the U.S. were to face a recession, it would be “moderate and short,” Mulvaney told roughly 50 donors, according to an attendee.”https://www.politico.com/story/2019/08/20/donald-trump-gop-donors-recession-1470360?nname=playbook&nid=0000014f-1646-d88f-a1cf-5f46b7bd0000&nrid=0000015d-ccf3-de22-abdf-eff70b570000&nlid=630318

    You can make book on this that if chubby trump says small recession, you just know it is gonna be a Lollapalooza that will make 2008 look like a rounding error.

  2. Moses6 2019-08-21

    Are we just blowing smoke here , let say 100 million in revenue we can be like Trump,Whoops the tax cuts gave us a 2 trillion dollar deficit.Slick Mike, and Photo op Thune voted for these, if I am right.Tax cuts will pay for themselves, like a tooth fairy will leave me a grand under the pillow.

  3. Debbo 2019-08-21

    It doesn’t get any better for SD. Farmers sure won’t be spending. From Numlock News, Walt Hickey:

    “Corn

    “Earlier this year, farmers were prevented from planting corn due to miserable weather. Now, that corn that they didn’t plant has (as expected) not grown, and scouts looking at the fields are worried about all the corn that isn’t there. South Dakota saw corn yields of 154 bushels per acre in 68 samples, down 13 percent from last year’s average, and in Ohio among 116 samples, yield of corn was down 14 percent. The data is preliminary but not encouraging.”

    Isis Almeida and Michael Hirtzer, Bloomberg

  4. Debbo 2019-08-21

    This paragraph comes from John’s link.
    (You should read the whole thing. It’s fairly short.)

    “Farmers both in Grand Island and Nebraska City cheered Pro Farmer’s Chip Flory when he questioned the ethanol blending exemptions that reduce demand for corn. On a tour stop in South Dakota, farmer Kurt Stiefvater gave the thumbs down when asked about the refinery exemptions.”

  5. Debbo 2019-08-21

    Budget Buffoon continues to trash the US recession, building on his tax giveaway to the rich. From the paywalled Strib:

    The federal budget deficit is expected to balloon to more than $1 trillion in the next fiscal year under the first projections taking into account the big budget deal that President Donald Trump and Congress reached this summer, the Congressional Budget Office reported Wednesday.

    The return of $1 trillion annual deficits comes despite Trump’s vow when running for office that he would not just balance the budget but pay down the entire national debt.

    The CBO projects that the economy will expand more slowly, from 2.3% this year to 1.8% on average in the next four years. The assumption reflects slower growth in consumer spending and government purchases, as well as the effect of trade policies on business investment.

    It also projects the unemployment rate will remain close to its current level of 3.7% through the end of 2020 and then rises to 4.6% by the end of 2023.

    is.gd/sG7g9C

    Perhaps Budget Buffoon is trying to add the US to his list of bankrupt failures before he’s booted out in 11/2020?

  6. Debbo 2019-08-22

    This is a picture of farm ownership in the South, where the revenue goes. Want to bet SD is much different? It’s from The Atlantic:
    ______________________________

    “TIAA [Teacher’s Insurance and Annuity Association] is one of the largest pension firms in the United States. Together with its subsidiaries and associated funds, it has a portfolio of more than 80,000 acres in Mississippi alone, most of them in the Delta. If the fertile crescent of Arkansas is included, TIAA holds more than 130,000 acres in a strip of counties along the Mississippi River. And TIAA is not the only big corporate landlord in the region. Hancock Agricultural Investment Group manages more than 65,000 acres in what it calls the “Delta states.” The real-estate trust Farmland Partners has 30,000 acres in and around the Delta. AgriVest, a subsidiary of the Swiss bank UBS, owned 22,000 acres as of 2011. (AgriVest did not respond to a request for more recent information.)”

    http://flip.it/.VdPT

    The article as a whole is about how Black Americans’ land was taken from them by hook or by crook, usually with government support. It’s definitely worth reading.

  7. Debbo 2019-08-22

    This link might work better. is.gd/SmosGE

  8. mike from iowa 2019-08-22

    Moar good economic news….https://www.rawstory.com/2019/08/brutal-new-recession-indicator-manufacturing-sector-contracts-for-the-first-time-in-a-decade/

    main cause seems to have something to do with the nasty trade war Drumpf inherited from Oba…nah, this is all Drumpf self inflicted on America because these things are so easy to win. All you have to do is not lose and Drumpf can lie about that.

    Fake Noize hired the pathological liar’s pathological lying former press secretary to push Drumpf’s agenda in the news.

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