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If Inflation Requires Millions in Additional Spending But No Hard Choices, Is Inflation Really a Problem?

Governor Kristi Noem’s proposed Fiscal Year 2024 budget includes several returns to the tax-dollar trough for construction projects that have overrun their original appropriations “due to historic inflation and supply chain issues“. Among the projects requiring extra cash are three Regental buildings:

Bureau of Finance and Management, "Rising Construction Costs: Board of Regents," 2022.12.06.
Bureau of Finance and Management, “Rising Construction Costs: Board of Regents,” 2022.12.06.

one National Guard facility (covered mostly by new federal funding):

The BG Dean Mann Sioux Falls Readiness Center will provide top-of-the-line training, logistical support, and administration functions for three National Guard units to meet any mission they may face. The 2022 Legislature approved $5,685,920 general funds and $16,291,974 in federal fund expenditure authority for the readiness center, but due to inflation and the competitive construction environment, the bids were over budget.

…The Governor’s recommendation includes an additional $667,000 in general funds and $8,001,000 in federal fund expenditure authority to complete the BG Dean Mann Sioux Falls Readiness Center, including the space for the additional unit [BFM, “BG Dean Mann Sioux Falls Readiness Center, Watertown Vehicle Maintenance Shop: Department of the Military,” 2022.12.06].

a Public Health Laboratory and Workforce Development and Education Center:

Building a new Public Health Laboratory and Workforce Development & Education Center was estimated to cost $69.6 million in late 2021, and the 2022 Legislature approved the Department of Health’s request for federal spending authority of this amount. Inflation has increased the estimated cost to $82.4 million. The Department of Health has applied for $69.6 million in federal grant funding through the United States Treasury Capital Project Funds, as approved by the legislature last year. This leaves a $12.8 million shortfall in funding, which is covered by Governor Noem’s budget proposal [BFM, “Public Health Laboratory and Workforce Development and Education Center: Department of Health,” 2022.12.06].

…and Kristi’s new horsey barn at the State Fairgrounds in Huron:

In 2021, the legislature appropriated $20 million for the DEX, including $12 million in general funds and $8 million in other fund authority to complete the project. Since then, due to significant increases in construction material costs, the project needs an additional $9 million. The $9 million in funding consists of $6 million in general funds and $3 million in other fund authority to allow for the donations necessary to finish the project [BFM, “Dakota Events CompleX (DEX)—State Fair: Department of Agriculture and Natural Resources,” 2022.12.06].

Construction costs have risen, and we have to spend more to get all these big government projects done. But remarkably, Governor Noem is claiming that we don’t have to tighten our belts to pay for any of these projects. If we aren’t having to cancel any of these projects, defund other priorities, raise taxes and fees, or make any other hard choices to address inflation and finish these jobs, as we have during other periods of “historic” inflation, then the current inflation must not be that “historic”.


  1. Jake 2022-12-12 09:14

    I wonder if these increased costs are all due to the world’s (not Biden’s) inflation factor or is there a “greed” factor at play here?

    The governor has laid the groundwork over the last two years developing a scape-goat for contractors to gain sympathy from the public and legislators with her constant blaming Biden for the world’s inflation problem. Thusly, legislators will gladly add $$$ to supplement these construction projects paid for by the state. GOP Contractors aren’t stupid or dumb and like good little “piggies” are usually first to the public trough of goodies…

  2. P. Aitch 2022-12-12 09:40

    Inflation is caused by unregulated free markets. Given freedom from regulation businesses ALWAYS revert to overcharging (i.e. gouging).

  3. Donald Pay 2022-12-12 10:02

    Yeah, if you can absorb those cost increases, great. Sales and use taxes, if nothing else, seem better equipped to cushion inflationary spikes. And all the Biden bucks sure helps, too.

    But let me boomer ‘splain something: today’s inflation is pretty tame compared to what some of us boomers went through during the late 1970s and early 1980s. I was working a job driving around Minnehaha County when gas prices nearly doubled (up to a whopping fifty-eight cents per gallon). My project’s budget didn’t foresee that kind of increase, so I had to change how I went about my project: less driving, more use of aerial photographs.

    The best way to beat inflation is not to buy, or at least buy only what is necessary to survive. People who think they have to go on buying the best cuts of meat and the biggest SUV are plain stupid.

  4. O 2022-12-12 10:19

    Donald, not only do they continue to buy, they finance at credit card interest rates of debt. If consumers acted rationally — reduced spending in the face of increased prices — then inflation would be curbed (I know that is a broad brushstroke, but I stand by it in general terms). The issue is problem is what Donald points out and Cory’s thesis of this piece: prices are increasing (from profiteering) and we are choosing to pay, so we are green lighting those extra profits. Again, the 1% are abusing their power to take advantage and the 99% are stupidly binding together too ENABLE that instead of coming together to bring it to heel.

  5. jkl 2022-12-12 10:39

    I hope nobody is considering not building our beautiful, state-of-art, most bestest gun range in Meade County.

  6. All Mammal 2022-12-12 12:51

    I have asked many people that question. They sure aren’t hurting all that much while taking pleasure cruises in their SUVs. They have nothing to cry around about. They’re just still salty because the libbs took their slaves away. They want that entitlement back. Haha. Confederacy 2.0 failed. Again.

  7. Mark Anderson 2022-12-12 18:50

    Gosh, Kristi has to spend biggly, she’s got those Blue states to pay for it doesn’t she? She’s got the short tailed weasel from Hillsdale to cover for her right? He’s no mink for sure.

  8. Bonnie B Fairbank 2022-12-12 20:01

    I agree with many contributors here, and I’d like to condense their observations and advice by typing “DON’T BUY IT IF YOU DON’T NEED IT.”
    Don’t be a slave to marketing, advertising, peer pressure, and empty lives demanding consumerism for fulfillment.
    Evaluate every purchase. Pay for it in cash or monthly credit.
    My unsolicited rant is over and I’m outta here.
    (Merry Christmas, HoHoHo…)

  9. leslie 2022-12-14 19:27

    Meanwhile, Thune Republicans want business tax cuts…but:

    Republicans have refused to engage at all on the [$300 mo] child tax credit,” [Dems] said in an email. “In fact they made clear they would not negotiate on any deal that includes the child tax credit.”

    Sen. John Thune (R-S.D.), the No. 2 Senate Republican, said Tuesday that he hoped lawmakers could reach an agreement to extend business tax breaks, but that he wasn’t getting “good vibes” on a deal with Democrats because the cost of the child tax credit was too high.

  10. Roger Elgersma 2022-12-16 08:53

    Inflation comes from government deficit spending which increases the money supply and it also increases government debt. Trump gave a tax cut and two payments for covid if you got covid or lost your job or not. Biden gave one covid payment. So when the republicans did three of the four cash handouts, they now blame Biden. The pandemic slowed the economy so it was not noticed when trump was in but he did cause the problem.
    Then during the last campaign Thune had a TV commercial that said that they would give a tax cut and we could all just sit back and watch how that works and watch how everything would work out. I sent a letter to the Argus that we did watch when Reagan gave a tax cut and the Republicans in Washington have never balanced the budget again. That is what happens when we sit back and just watch Republicans. The Argus did not print the letter but within 24 hours Thune took his add off of TV and switched for an add about how cute his grandkids are.

  11. Roger Elgersma 2022-12-16 09:06

    Since money should be worth something, super low interest rates bring an imbalance in the economy. To low of interest rates encourages bad investments that do not properly pay their way. It also discourages savings when savings should be part of a good healthy economy. An old banker said that when interest rates were always at five percent, the bankers knew what they were working with and the economy kept moving without government spending programs to adjust the economy. So super low interest rates may have gotten us through a deep recession, but that is not a long term plan. Under Biden we are getting more normal interest rates which will give us a good solid plan for the future of the economy. Making a basic change like this will cause some adjustments and some of them may be a bit tough. But those adjustments will be building a more stable economy with stronger businesses in the long run. That is because those investments that do not pay enough to pay normal interest will not be made and only those investments that build true growth will happen. The Republicans should be thanking Biden. But that is not how politics works nowdays.

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