Governor Noem’s proposed budget targets workforce, infrastructure, housing, and more

Noem sought to balance fiscal conservatism with having to spend millions of dollars obtained by way of President Biden’s American Rescue Plan Act (ARPA).
Governor Kristi Noem proposed a plan to spend millions of dollars in federal COVID relief funds, while also continuing to push fiscal conservatism.
Published: Dec. 7, 2021 at 5:33 PM CST
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PIERRE, S.D.- In the midst of soaring inflation, Governor Kristi Noem is calling for 6% raises across the board for state employees, healthcare workers, and teachers.

However, that is not the only spending project Noem is looking to dive into with her proposed budget.

The governor’s budget also includes $200 million for workforce housing grants, $100 million for grants for more daycare centers, and $60 million for improvements to the state health lab, and several million for various improvements to the state’s colleges and universities. Most notable of those, Noem wants to invest $30 million into Dakota State University to help the university grow its cyber security program.

Noem began her address to state lawmakers Tuesday noting South Dakota is in a strong financial due to the state’s decision to stay open through the COVID-19 pandemic and by extension, the work to attract people to the state.

“During the pandemic, our state stood apart from the rest of the country,” Noem said. “When they shut down, boarded up, and stayed indoors, we stayed ‘Open for Business.’”

In part because of these successes, Noem explained she had originally considered turning down the coronavirus relief money that had come from President Biden’s American Rescue Plan Act (ARPA), but determined that would not be a smart decision.

“If we don’t take the dollars that are coming to the state of South Dakota from the bills in Washington, they’ll just redistribute that to other states,” Noem said in an interview after the address. “The debt will still be incurred by the country, we will still deal with the consequences of rising inflation, but we won’t really have the opportunity to set ourselves up for success.”

While suggesting the state spend hundreds of millions of dollars on those “quality of life” projects, Noem said that she would like to set aside even more money, 14.5%, into budget reserves this year. In years past, only 10% was typically set aside into budget reserves.

“We have the revenue, and we want to recognize what’s happening outside the borders of South Dakota,” Noem said. “The increased taxation Biden is talking about, increased regulation, the increased crunch on making sure there are penalties from federal regulations coming, and the skyrocketing costs because of inflation and those policies. we are going to have to live in a very different world for a few years.”

Democratic members largely expressed support for much of what was proposed in Noem’s budget. However, they said that they would like to see raises for workers more decisively outpace inflation.

“We need to be cogniscent that the 6% just keeps us flat with the inflation going on around us,” said House Minority Leader Jamie Smith (D-Sioux Falls). “While it is a huge and historic number, in order to get ahead I think other state’s around us are going to be doing things like that, and we need to keep moving the ball forward.”

“I thought the Governor did a fantastic job today,” said State Sen. Casey Crabtree (R-Madison). “We are making a lot of smart investments that will pay off today, pay off in the next five to ten years, and even further. These are transformational projects, but they are also just smart investments.”

To watch the full address, click here.

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