Noem Silent on Approval of Food-Tax-Repeal Petition; Mortenson Says Voters Can’t Cut Taxes

Governor Kristi Noem said a lot on Twitter and on second-tier wingnut media this week. Remarkably, she did not say anything about citizens launching a petition drive to enact her biggest legislative priority and biggest failure of the 2023 Legislative Session, repeal of South Dakota’s unusual food tax:

Rick Weiland, Co-Founder of Dakotans for Health announced today that his organization has received final approval from the South Dakota Secretary of State to start collecting signatures for its ballot measure to repeal the state’s tax on food.

“South Dakota is one of only three states in the country that still taxes groceries at the full state sales tax rate and we are going to change that,” Weiland stated. “Even Governor Noem has publicly stated that she will sign our petition to remove this regressive tax that disproportionately affects low-income, working-class families in South Dakota. We welcome the Governor’s support and thank her for her recent efforts to try and get this done during the last legislative session,” Weiland continued [Dakotans for Health, press release, 2023.04.27].

I would think that Governor Noem would be flooding her Facebooks with exhortations to her many supporters to get out and sign that initiative petition and sign up to collect other Noemaniacs’ signatures. But so far, not a word from Noem about taking the food-tax repeal to the people whom the Legislature so cruelly snubbed this winter. Gee, could it be her attention is elsewhere and she just missed this important South Dakota news?

One of the leading snubsters, House Majority Leader Will Mortenson (R-24/Pierre), is paying attention, and he jumped to the mic to tell KELO-TV that he still thinks repealing the food tax is a bad idea:

“I think the effort to repeal the sales tax on food through the ballot is irresponsible and imprudent,” said Republican Will Mortenson, who served as House majority leader during the session.

Mortenson says lawmakers took a hard look at the question of how to cut taxes.

…Mortenson says a proposal of a tax cut without a way to finance it is “irresponsible.” According to a January estimate, repealing the state sales tax on groceries all together would save taxpayers just under $124 million in the first year [Dan Santella, “Supporters Have Green Light to Circulate SD Grocery Tax Repeal Petitions,” KELO-TV, 2023.04.28].

Note that Representative Mortenson is really saying that he wants to make it impossible for voters to propose tax cuts. He says voters can’t cut taxes unless they accompany that tax cut with a proposal to make up for the lost revenue. The only ways to make for lost revenue are to raise other taxes or cut funding from programs. But if voters were to propose such a measure—say, cut the food tax and impose a tax on all six-figure annual incomes, or cut the food tax   and replace 50% of the revenue by transferring funds from the Governor’s Office of Economic Development and the other 50% by tapping the budget reserves—Mortenson would be at the front of the Republican mob crying “Single-subject rule!” Under the infinitely malleable single-subject strictures that Mortenson and his party have foisted upon the voters, no initiative could do what he demands of a tax-cutting initiative, because that initiative would have to address multiple subjects—cutting Tax A, raising Tax B, defunding Program C—and Mortenson has empowered the Secretary of State to extra-judicially refuse to allow a multi-subject initiative petition to even circulate, never mind come to a statewide vote.

Besides imposing an impossible legal burden on tax-cut initiatives, Representative Mortenson is posing a false premise. Citizens seeking a tax cut are under no obligation to propose replacement revenue. If a tax is bad for families and children, if it is regressive and immoral, citizens have a right (and arguably a duty!) to eliminate that harmful and immoral tax. We have a Joint Appropriations Committee; let them figure out how to replace the revenue, if that revenue needs replacing.

Besides, Mortenson and his colleagues didn’t propose replacement revenue for the 0.3 percentage points they cut from the state sales tax; they are just counting on magic money from ongoing economic growth.

And Mortenson and his colleagues themselves have already given food-tax repealers the replacement money Mortenson is demanding. Remember that concerns that citizens would repeal the food tax in 2025 (the vote would happen in November 2024; approved initiatives take effect July 2025) drove Mortenson and his colleagues to tack a sunset clause on their general sales tax cut in House Bill 1137. The cause of much gubernatorial word-gamery, that sunset clause boosts the general sales tax back to 4.5% in 2027. So if voters repeal the food tax without any other fiscal adjustments, we’ll get a couple of years to see how sales tax revenues hold up, and if things get tight, the 4.5% sales tax rate will kick back in on everything else and ease the fiscal strain.

I’m glad Mortenson opened his mouth on the proposed food-tax-repeal initiative. I’m just disappointed that everything he said about it is wrong. Now let’s see what the Governor says about this effort to rescue her food-tax repeal and give the people what the Governor said they wanted.