South Dakota Gov. Kristi Noem’s push to cut a state tax on groceries has been met with opposition and noncommitment from fellow Republicans.
Noem, a fiscally and socially conservative Republican, cruised easily to victory and a second term in November 2022 with 62 percent of the vote.
In 2022, as consumer goods prices spiked, reducing grocery prices found favor with elected leaders across the country.
The Republican governor’s tax-cutting initiative enjoys a solid base of support among South Dakota Democratic lawmakers, although Noem is still trying to win over some influential politicians in her own party.
Tax Cutter
Noem asserts that South Dakotans are especially in need of a grocery tax cut because of rapidly rising food prices caused by inflation.South Dakota levies a 4.5 percent sales tax on groceries and is one of only three states that fully tax groceries without offering consumers a tax credit; 10 other states tax groceries but offer a way to recoup the money through the credit; and 37 states don’t tax groceries at all.
“I have been to a lot of grocery stores across the state over the past few months,” Noem said in the State of the State speech. “Prices have increased so dramatically over the past two years that families are unprepared when they see the final bill in the checkout line. When I’ve been checking out groceries, about one in every four shoppers have had to put something back because they can’t pay for everything. Folks, South Dakotans need this relief.”
Legislative Hurdles
Even as the governor makes the case that South Dakota residents need the tax relief, she faces opposition or noncommittal from Republican state lawmakers, including House Speaker Hugh Bartels.Noem maintains that South Dakota can afford the grocery tax cut. She says the state is fiscally strong enough to absorb the loss of tax revenue, and the benefit accruing to South Dakotans in the form of more money in their pockets can be obtained without a loss of public services.
“We have a AAA credit rating,” it states. “And tax revenues for FY 2023 have beaten projections by $135 million through November 2022.”