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March 8 Video: Noem Said Food Tax Opens Door to Income Tax, Can’t Be Discussed Without Proposing Budget Cuts

Given Governor Kristi Noem’s disagreement with both Senate President Pro-Tempore Lee Schoenbeck and Speaker of the House Spencer Gosch about where she stood on repealing the sales tax on food during the 2022 Legislative Session, let’s put Noem’s own words during Session on the record.

In addition to comments Noem made opposing any reduction in sales tax in early February, Noem sat for a discussion told reporter Joe Sneve, in a livestreamed interview on March 8, 2022, that proposals to repeal the food tax and to lower the overall sales tax rate were meant to push a state income tax. She said sales tax cuts would force the state to make painful budget cuts comparable to the deep 10% cuts that Governor Dennis Daugaard and the Legislature had to work out in 2011 to reconcile a severe structural deficit. She indicated that elected officials who propose a food tax cut without offering details on what programs they will cut to make the food tax repeal work are not having an honest debate.

[6:12] Sneve: Well there has been two proposals, both have died in the senate, one to reduce sales tax by a half penny and then yesterday, a bill was a hoghouse to have a food sales tax repeal that also died. You’ve been resistant to that though. Is that… because you don’t think things are going to be that rosy that long?

Noem: Well it’s just—I think they’re setting us up for an income tax. I think that they know when they propose something like that it’s not sustainable as far as our current programs and they know that they’ll be putting South Dakota in the position to get in—have a significant income tax debate within two or three years

Sneve: Isn’t the counter to that though that could force the government’s hand to narrow its scope and make cuts down the line?

Noem: None of these legislators were here last time they had to make significant cuts at state government. It was a pretty painful process…those 10 percent cuts that happened across the board that happened during Governor Daugaard’s administration and you know they’re not debating at all the six percent increase that goes to education and state employees and health care providers, but making those cuts is a painful process and none of those legislators that are proposing—it’s always interesting to me—proposing these significant programs are offering up savings.

I had one legislator in my office yesterday that said I should be building housing for low-income people and children that don’t have homes, and I said well did you bring a bill on that this session? And they didn’t.

So a lot of times they throw things out to me and they haven’t offered a solution on where to cut. So if they’re looking at reducing spending for state government, I didn’t see those house appropriators bring forward big bills to reduce programs this year. I didn’t see it and if they brought some and Larry can give a little perspective I suppose on what it’s like in state government, but we—I offered tax reductions this year. I offered tightening our belt and we’ve reduced full-time employees in state government. We’ve let leases go on state government, we’re doing that. But to force something like that is just setting the state up for an income tax….

[11:00] Noem: So while they go and propose eliminating the sales tax on food—I understand that debate. We had—when I was in the Legislature, I was on the tax committee, vice chair of tax committee, we debated that every year, and so that is certainly something I’m familiar with. To bring it up the last week and then not offer cuts to make it actually work or not to be palms up and say if we do this then you can’t give six percent to education, you can’t increase teacher salaries, you can’t pay health care providers, and you can’t increase wages for state employees, because that’s an honest debate, and they’re not having that right now… [Governor Kristi Noem, interviewed by Joe Sneve, in “Gov. Kristi Noem Joins State Budget Panel Discussion,” video posted to Governor Kristi Noem Youtube channel, livestreamed 2022.03.08].

Governor Noem did not support cutting the food tax last winter. She said repealing the food tax would open the door to an income tax. She said we shouldn’t even talk about cutting sales tax unless we have an honest discussion about replacement revenue or spending cuts. Yet since the end of September, when she reversed course and endorsed repealing the food tax, Noem has proposed no budget cuts or replacement revenue to make the food tax repeal work.


  1. Mark Anderson 2022-10-24 20:52

    She could be like Donald Duck and tax the air we breathe while wearing a golden helmet.

  2. sx123 2022-10-24 21:17

    Even if food sales tax needs to be replaced with other income sources, that doesn’t change my opinion that sales tax on grocery food is borderline unethical and should be eliminated, at least for unprocessed, minimally processed, and baby related foods. Might even help persuade people to eat healthier. A positive incentive instead of raising sales taxes on things as a negative incentive.

    In modern times, we have things called databases that can easily keep track of this stuff.

  3. grudznick 2022-10-24 21:34

    Mr. SX123, I am informed databases are old hat.

    Today’s youngsters who are “hip to the tech” and wear those shoes that light up when you jump, and hats with beer holders, use something called “blockchain” to track all that stuff. grudznick is not hip to the tech, although I do have a hat with beer holders given to me some years back, although I lost the straw, which was really a hose-like contraption.

  4. Cory Allen Heidelberger Post author | 2022-10-25 06:11

    I’m with SX123 on the unethical part. I disagree with Noem’s March claim that we are obliged to propose spending cuts before we can talk about a food tax cut. Noem in October now seems to have changed her mind to reject her March argument and agree with me.

  5. M 2022-10-25 06:37

    We all know Noem is a liar with pants on fire. When she mentioned switching to a state income tax or taxing marijuana, I cringe. It means I’ll still pay the tax just for something more unfair. People with foodstamps don’t pay taxes on food alright!!!! They already get a break.

    Look, I’m a retired S.D. teacher, get S.S. and still have to work at age 67 just to make ends meet. My S.S. is being taxed and I’m just sick and tired of it. I have no savings, no stocks, bonds or investments. I’m paying for prescriptions and necessities like glasses, hearing aids with a Visa.


  6. O 2022-10-25 08:26

    A thoughtful discussion of a fair taxation system moving its way through Pierre into effective legislation is fantasy. I have spend a little time in Pierre (and have the rash to prove it — thank you. I’ll be here all week!) dealing with funding issues, and I have found it to be far more grudznick-like noise and less m-like information at the heart of discussion.

    Income tax is a dirty word in Pierre; I don’t think that door is ever open. It has become political dogma of the right that it would be the downfall of the economy — at least the economy we have propped up in SD for those we have propped up the economy to benefit. Unfortunately, any income tax would begin with the crucial first step of asking the un-askable question: how much do you make? That is a question that far too many do not want answered here. We have created an industry dedicated to hiding assets; we mythologize poverty in wealthy farming operations; we do not discuss such matters in polite conversation — or so is said when the help is within earshot. An income tax requires an honest accounting of income, and SD is not prepared to take that step into the light.

  7. Richard Schriever 2022-10-25 08:48

    M “Look, I’m a retired S.D. teacher…..” So, in other words, your entire career has been funded by tax dollars, and yet you cry, “NO MORE TAXES AT ALL..” I.E., it’s the old, “I got mine, screw you.” for you.

    BTW – Get off my lawn!!!

  8. Richard Schriever 2022-10-25 08:50

    O – I don’t see M and the grudz as being all that far apart. Please, take another look.

  9. Donald Pay 2022-10-25 09:02

    Sadly, O is probably correct. The South Dakota Legislature and every Governor since Kneip are a subsidiaries of the South Dakota elite. As long as people elect those who cater to the elite, rather than represent constituents, you will never see an income tax.

    I don’t agree with O that it has to do with hiding assets. It’s not like in the old days in the Midwest, where rich folks lived like the rest of us, They might have owned more land, which they were taxed on, by the way. Now they own assets that they are not taxed on, but they build McMansions now, so everyone knows they are wealthy. People in every community in the modern world know who is wealthy and who is poor.

    I agree that an income tax requires more honesty in accounting, although, as we see with Donald Trump, there are ways to survive a long time by being dishonest.

  10. O 2022-10-25 09:35

    Donald, I argue that even with the McMansions, there is a cognitive dissonance in what many perceive as wealth — not to mention the “second homes” and other unseen assets. I don’t think many SD residents really allow to sink in how well-off some of their “neighbors” are. I we were to ask most workers how much their CEO/Owners — even upper-managers take home, I think they would WAY underestimate those amounts.

    I do think the larger point I will come back to is how little a tax burden these folks bear when they can afford to flaunt assets like we are discussing here.

  11. 96Tears 2022-10-25 11:03

    Pathological liar Kristi Noem is now arguing with herself.

    What she said only in March is light years from what she says in October when she’s within 3 points of losing re-election. A 60-minute ad of Kristi seven months ago and Kristi today flipflopping like a sucker fish in the bottom of a boat would be entertaining and deadly.

    Send Kristi Noem home, where ever the hell that is anymore. Send big donations to Jamie Smith as soon and as often as possible.

  12. Donald Pay 2022-10-25 13:30

    What percentage of family income goes toward taxes in South Dakota? The Institute on Taxation and Economic Policy has calculated it all out according to income brackets. Those families at the bottom (lowest 20%, or families making less than $25,000) pay 11.2% of family income toward state and local taxes. Those at the very top (the top 1%, or families making over $559,000) pay only 2.5% of their family income toward state and local taxes. South Dakota’s tax system tilted to soak the poor and middle class, while the state’s elite are deadbeats.

  13. Arlo Blundt 2022-10-25 14:06

    “It’s not like the old days in the Midwest, where rich folks lived like the rest of us”. How true, Donald. It is an amazing social phenomena in South Dakota. Used to be the social norm was that we were all in the same boat. Now, only the elite have a boat, everyone else is treading water, and desperately trying to keep their head above water.

  14. larry kurtz 2022-10-25 17:57

    FWIW: Sioux Falls is rethinking its video lootery rules because the social costs are outpacing the revenues. The council just adjourned.

  15. Mark Anderson 2022-10-26 16:23

    If you get in trouble in any part of the United States financially, you can quickly buy a residence in Florida that is beyond the reach of anyone. Why do you think Florida is turning red? No income tax either. It’s full of rich crooks and poor people. Paradise.

  16. Mark Anderson 2022-10-26 16:27

    Arlo, my dad was a blue collar worker we lived on the same block in Sioux Falls with the best Orthopedic surgeon. His kid was a friend of mine. It was the early 60s of course.

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