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Noem’s budget plan heavy on infrastructure investment

Published: Dec. 8, 2020 at 12:38 PM CST
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PIERRE, S.D. (Dakota News Now) - Governor Kristi Noem laid out a budget plan that includes substantial investment into the state’s infrastructure in her budget address, as the state sees a financial windfall despite the coronavirus pandemic.

Noem’s budget, which she delivered Tuesday afternoon at the State Capitol in Pierre, also emphasized debt repayment and investment in technical education. While it covered fiscal year 2022, it included many recommendations and special appropriations for the 2021 fiscal year as well.

South Dakota will head into the next fiscal year with a budget surplus following better-than-expected tax revenue and federal coronavirus stimulus payments. Noem’s general fund budget totals just over $5 billion.

“We closed the 2020 budget year in June with a $19 million surplus, and our general fund revenues are up by 19.4% right now, compared to the same time last year,” Noem said. “We took steps last year to cut spending and be cautious with taxpayer money, and we are seeing the fruits of that today.”

Infrastructure investments

A highlight of the budget is a $200 million investment to expand access to broadband over the next few years, particularly in underserved areas. Half of the funds for this investment will come from the state’s general fund.

The budget also includes $19 million for a new state fair livestock complex in Huron, $12 million of which would come from the general fund. The old complex burned down on Oct. 31.

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A rendering of a proposed replacement for the livestock complex at the South Dakota state...
A rendering of a proposed replacement for the livestock complex at the South Dakota state fairgrounds in Huron.(South Dakota State Fair)

Noem also proposed spending $5 million from the general fund to create a grant program to improve the state’s ability to process and store South Dakota-raised meat products.

Other infrastructure proposals include money to maintain state-owned dams, upgrading the state’s air fleet, and investing in equipment for high-demand programs at the state’s technical colleges.

The Governor touted the coming arrival of the B-21 Raider to Ellsworth Air Force Base near Rapid City.

“The base will be undergoing extensive mission growth in the very near future,” Noem stated. “Preparations have begun in support of the next generation bomber, the B-21 Raider, and its placement at Ellsworth.”

Ellsworth Air Force base will be the first base to house the B-21, and as a result, will also host the training as well. The training itself is expected to bring thousands more military members to the state. To help facilitate this, the Governor is asking for $3.2 million to build a recreational center near the base, to replace one that will no longer be available due to construction related to the B-21 Raider.

“It will be a place for community and connection, which anyone in our military, along with their spouses and children, will tell you is critical for a family that is constantly on the move.”

State Senator Helene Duhamel (R-Rapid City) says that the B-21 Bomber is important for the entire state of South Dakota.

“Not even for (just) western South Dakota, that is a big deal for the entire state of South Dakota,” Duhamel said. “To build it out, bringing 14,500 people (here), that is a big deal for all of us. What an honor it is for them to pick Ellsworth Airforce Base.”

Other highlights

The budget plan included several education proposals, including a one-time investment of $11 million to serve as a bridge for schools facing financial shortfalls after drops in enrollment due to the coronavirus. This would be in addition to a proposed 2.4% inflationary increase to K-12 education spending. However, Democratic legislators are signaling their intent to get that raise to 3%.

“We need to remember that budgets are about people. (And) During this economic downturn, we need to make sure the people of South Dakota have the resources that they need,” says Sen. Reynold Nesiba (D-Sioux Falls). Nesiba also serves as the Minority Whip in the State Senate.

Noem proposed bolstering South Dakota’s existing rainy-day fund by putting $50 million in an existing trust fund. She also recommended adding an extra 2% to the regular 10% budget reserves.

The plan also included a $21 million payment to pay off technical school bonds issued in 2010. Noem said it will save $1.7 million in ongoing debt service.

While Noem expressed optimism over the state’s financial situation, she urged continued caution moving forward when it comes to spending taxpayer money.

“The important takeaway here is a message of caution: we should remain prudent and conservative moving forward,” Noem said. “We need to carefully consider these unusual circumstances as we project revenue. We cannot recklessly spend every taxpayer dollar that we have. When we do invest in our state, we must invest wisely and strategically.”

MORE: Read Noem’s full 2021 budget address

Coronavirus in South Dakota

The topic of the coronavirus loomed large throughout the address, and the governor began her speech with a moment of silence to remember South Dakotans who have died due to COVID-19. As of Tuesday, that number stands at 1,111.

Noem’s handling of the coronavirus has seen a polarizing response, with supporters praising her focus on individual liberties while critics say she put economic interests over public health. While South Dakota saw low COVID-19 case numbers in the early months of the pandemic, both cases and deaths have increased substantially in recent months. The New York Times reports South Dakota has the most deaths per capita over the past seven days.

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Gov. Kristi Noem delivers plans for South Dakota's 2021 budget in Pierre on Dec. 8, 2020.
Gov. Kristi Noem delivers plans for South Dakota's 2021 budget in Pierre on Dec. 8, 2020.(Dakota News Now)

Noem spent much of the early part of her address toting her hands-off approach to the pandemic, saying “South Dakota is entering 2021 in one of the strongest financial positions in the country.” She said other states that issued lockdowns will likely see tax increases or an increase in debt.

The governor cited a number of statistics she included in an op-ed published Monday in the Wall Street Journal, which she asserted shows South Dakota’s success in dealing with the pandemic. However, another national newspaper - The Washington Post - published an analysis Tuesday criticizing Noem for “cherry-picking” statistics in the op-ed. Among the points repeated included a statement about Illinois seeing a single-day record in COVID-19 deaths on Dec. 2 despite the state implementing lockdowns.

“Illinois’s new single-day high in covid deaths on Dec. 2 was 266. That’s 1 out of every 47,000 residents. Where South Dakota was on that day: 47 deaths. That’s 1 for every 19,000 residents,” The Washington Post article noted. “Even on the day spotlighted, South Dakota’s per capita death rate was more than twice that of Illinois.”

Comments on Biden

Noem acknowledged the possibility of a Joe Biden victory in the November presidential election over President Donald Trump. Noem, who frequently campaigned for Trump, has not yet publicly stated whether she believes Biden won the election as Trump continues legal challenges in several swing states.

In her speech, Noem acknowledged that a Biden presidency could be coming, though she stated it with a tone of foreboding.

“Frankly, I expect the road could be rough under a Biden administration,” Noem said. “We can expect him to try and raise taxes. Similarly, we can expect him to try and eliminate fossil fuels by passing the Green New Deal. And, whatever else a Biden administration might do, it would certainly drown us in new regulation. I expect Biden’s federal agencies to see South Dakota not as a partner but as a subordinate.”

The Governor will be holding media events in Rapid City and Huron on Wednesday Dec. 9, the sites of where she would like to see two of her biggest budget proposals come to fruition.

Watch the full address below. To read the full address, click here. To view the budget in its totality, click here.

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