PIERRE — South Dakota Gov. Kristi Noem called for more than $70 million in cuts to social services and other government expenditures in an effort to redirect investments into the state’s workforce, health care and education initiatives.
During her annual budget address on Tuesday, Dec. 3, the state’s second-term governor announced $71.9 million of proposed cuts to existing departments, including those that provide assistance to low-income families and oversee child welfare.
“The national economy remains anemic. However, the great American comeback will soon take off,” she said. “Until then, we have to make some tough decisions to deliver the 136th consecutive balanced budget for South Dakota.”
Though Noem did not provide specific dollar amounts, she called on lawmakers to “right-size” various programs under the Department of Social Services and Department of Human Services to better match their utilization.
Those cuts include a reduction in the state’s match into the Temporary Assistance for Needy Families program, which provided $12 million in mostly cash assistance to low-income households in 2022.
Some of those programs have been reverting money back to the state at the end of each fiscal year, Noem said, arguing the money could be made available elsewhere.
She also expects the Board of Regents — which oversees more than 34,000 college students — to make cuts upwards of $2 million, and asked lawmakers to reduce state funding to South Dakota Public Broadcasting.
“Currently, South Dakota has the third highest per-capita funding of public broadcasting of any state in the nation,” she said. “We’ve been paying more than double the national average.”
Noem cited in part a bearish economy under the Biden-Harris administration as part of why the state’s income has slowly declined, but called on state lawmakers to use available one-time dollars and additional capital obtained through planned cuts to fund a variety of statewide initiatives.
“Our state is an example of fiscal responsibility, of limited government, of what can be accomplished when we trust in our people and respect their freedom,” she said. “We don’t just talk about these things. We make the tough decisions to back up those words with action, and the results prove our approach is correct.”
Noem said her new budget proposal looks to continue investing in the state’s workforce by furthering targeted pay increases for “big three” employees: those working in schools, state government and health care. The recommendation was a 1.25% pay increase for those employees.
“Since I took office, the Consumer Price Index has increased by 24.9%. With this budget, we will have provided inflationary increases of 27.9%,” she said. “This should keep us ahead of the increase in inflation.”
She also called for a permanent decrease in the state’s sales tax. Previous reductions were temporary, known as a tax holiday. In 2023, a tax holiday lowered the state’s income tax from 4.5% to 4.2%. That reduction is set to expire in 2027, according to the South Dakota Department of Revenue.
In order to build South Dakota’s workforce, Noem said education is a precursor. To start, she wants public dollars to be made available for all children in South Dakota, including those whose parents may opt for private or alternative education.
“I am setting aside $4 million in ongoing dollars to stand up the program to start providing support for South Dakota students,” she said. “This investment will pay for a portion of private school tuition or curriculum for alternative education — beginning with about $3,000 per student.”
The funds, which Noem referred to as Education Savings Accounts, won’t result in any cuts to public education, she clarified. She hopes to see the investments grow to make additional monies available to all students statewide.
“We want those students to receive the education that’s best for them and to have the freedom to do so,” she explained. “I look forward to working with both legislative chambers to get this done.”
Other education investments Noem called for include further efforts to improve the state’s literacy scores and one-time grants to improve school safety.
To cap off the “big three,” Noem pivoted to additional investments in the state’s health care initiatives, including a $1.2 million investment in regional facilities that focus on mental health.
“In the past, when a South Dakotan was experiencing a mental health crisis, they would end up in jail or in the emergency room,” she said. “Now they can get appropriate help closer to home. This effort is a big reason why South Dakota continues to lead the nation with the largest drop in overdoses of any state.”
It’s not just mental health that Noem is asking the Legislature to focus on in the next fiscal year, either. It’s also general health. Citing the Legislature’s work to fully fund expanded Medicaid in the state, Noem noted that an additional $27.8 million is necessary, and called on lawmakers to take on a larger share of that investment.
Though other budget items Noem addressed fell outside of her “big three,” she looked at increasing budgeting to build dams, reserve National Guard troops for future assistance at the southern border, invest in IT and cybersecurity, and continue funding the construction of a men’s prison to the south of Sioux Falls.
“We are estimating $76 million in interest on those dollars in the coming years as the prison is being built. My budget meets the remaining need of $182 million in one-time dollars to fully fund this new prison,” she said. “Paying cash for this facility will save more than $600 million in interest, fees, and annual debt service payments.”
Noem due for likely promotion to Trump’s cabinet
A longtime Trump ally, Noem was announced just one week after the 2024 general election as the incoming president’s pick to lead the U.S. Department of Homeland Security.
“Kristi has been very strong on Border Security,” Trump said in a statement. “She will work closely with ‘Border Czar’ Tom Homan to secure the Border, and will guarantee that our American Homeland is secure from our adversaries.”
South Dakota’s governor isn’t new to calling attention to the country’s southern border. While running for a seat in the U.S. House in 2010 — an election she’d win over Democrat three-term incumbent Stephanie Herseth-Sandlin — Noem stood with Senate Republicans in an effort to defund President Barack Obama’s lawsuit over a strict Arizona immigration law.
“Illegal immigration must come to an end. Since the federal government has failed in its leadership on this issue it is not surprising that states have stepped up and are working to enforce the law and secure the border,” Noem said in a 2010 statement. “The last thing the federal government should do is stand in their way.”
More recently, she’s been openly critical of sanctuary cities for undocumented immigrants and even sent the South Dakota National Guard to the southern border to assist with installing fencing and general security measures.
South Dakota was the first state to send National Guard to the border when Texas asked for help.
— Kristi Noem (@KristiNoem) August 16, 2024
Our @sd_guard constructed more than 5 miles of border wall in Texas.
They fortified 20 miles of wall with concertina wire.
They repaired 46 breaches in the crucial area between Del… pic.twitter.com/JyOz7yKG2O
Despite strategic moves aimed in part toward gaining favor within the Republican party, Noem suffered a blow to her image after admitting in a book she authored to shooting and killing a hunting dog that she labeled “untrainable.”
In response, Trump, however, called Noem a “terrific person,” branding the negative headlines as “a bad week.”
Only one other South Dakotan has ever served in a president’s cabinet — Clinton P. Anderson served as secretary of agriculture under President Harry Truman from 1945 to 1948. Though Anderson was an elected U.S. representative from New Mexico, he was born in Centerville, South Dakota, and attended Dakota Wesleyan University in Mitchell, for a period of time writing for the Mitchell Daily Republic.
Noem’s likely departure from the governor’s office will also come with the promotion of Lt. Gov. Larry Rhoden, who had served in both the South Dakota House of Representatives and the state Senate before serving two terms with Noem.
North Dakota Gov. Doug Burgum is also likely to see a promotion after he was named to serve as Trump’s Interior secretary. He’ll be replaced by U.S. Rep. Kelly Armstrong, who was elected by North Dakotans in November.
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