Noem: Lawmakers “wrong” to reject repeal of grocery tax

PIERRE, S.D. (AP) — South Dakota lawmakers rejected a proposed repeal of the state’s grocery tax on Tuesday — despite Republican Gov. Kristi Noem’s testimony in support of the measure.

Noem’s testimony before the House Appropriations Committee was an unusual move for the leader who has rarely appeared in public this session. She had opposed the $102 million tax cut in the final days of the 2022 legislative session, but she changed course months later to make it a centerpiece of her reelection campaign. Since her win, she has been trying to do right by her campaign, culminating in Tuesday’s final shot at swaying lawmakers in her favor.

“The narrative is going to be that the legislators in this capitol think they know better than the people in this state, and I would disagree. We have to always keep our perspective on the people here that keep this state running, and it’s certainly not policymakers who run around during session for 40 days,” Noem told reporters.

During her testimony, she said the taxes would have helped people across different socioeconomic statuses and it was a good time to implement the long-suggested tax cut, while the state has a surplus.

Lawmakers have discussed various tax relief proposals since the beginning of the session, agreeing that between cuts to taxes on groceries, general sales and property, only one plan is feasible. The Republican caucus voted over the weekend for the general sales tax cut, favoring its general scope of relief.

Republican House Majority Leader Will Mortenson said that after deep scrutiny on each of the proposals, his fellow representatives agreed that a single exemption to groceries was too narrow of an issue to tackle in a tax cut.

“The caucus decided that they would prefer to keep a broad sales tax base and cut the rates,” Mortenson said. “We wanted to cut taxes on food and fireworks and fencing supplies and everything.”

Noem hopes people in the state feel that rate drop should it pass further, but she was disappointed at losing the opportunity to remove South Dakota from the list of seven states that continue to tax groceries. The loss adds to other legislation she campaigned on that lawmakers have halted, like state investments into family welfare.

She added that grocery tax discussions would continue in future legislative sessions.

“What has always been refreshing about the state of South Dakota is that we have those hard policy debates, and we make the best decisions,” Noem said. “Today they did not make the best decision. They made the easy decision, and it was the wrong one.”