Noem’s sales-tax promise shows panic during a campaign that should be easy
Gov. Kristi Noem attends an event Oct. 12, 2022, at a Sioux Falls grocery store. (John Hult/South Dakota Searchlight)
Kristi Noem’s sudden interest in repealing the sales tax on groceries seems like a desperate campaign tactic for a governor who should be coasting to reelection.
It shocked legislators, and her onslaught of advertising saying she will repeal the sales tax belittles a Legislature responsible for funding state government.
One has to wonder why Noem needed to make the nearly impossible promise to cut $106 million in ongoing revenue from the budget.
Is the election going that badly?
“The first time I heard of it was from news reports of the (Sept. 28) news conference she held,” said state Senate President Pro Tempore Lee Schoenbeck.
He said he would oppose the cut. “If you cut $106 million out of the budget, you are going to close the nursing homes in our state,” he explained.
Something caused Noem to do an about-face.
“It is fiscally irresponsible and something people do when they are trying to set us up for an income tax,” Schoenbeck said. “She said as much in a videotaped interview back in March and I agree with her about that.”
It is perplexing. Noem should have an easy time getting reelected.
After all, registered Republicans are nearly half of South Dakota’s voters while Democrats are 25.7 percent and independents (who tend to vote more Republican) are about 24 percent. Frugal Gov. Dennis Daugaard won his reelection with more than 70 percent of the vote.
A victory in excess of 60 percent should be assured. But that outcome is unlikely, because Democrat Jamie Smith is performing better than expected, largely because of Noem’s own missteps.
Those missteps began back in 2018 when she shattered South Dakota norms by running a negative last-minute primary campaign against fellow Republican Marty Jackley. She never made any effort to heal her own party.
Instead, she surrounded herself with out-of-state consultants who see this election as a speed bump before returning her to the national stage.
Their strategy is to hammer Smith with negative, dishonest advertisements and to deflect attention with promises of sales tax cuts. If she wins, she can blame the Legislature for failing to fulfill her promise.
Meanwhile, she’ll be on the lucrative fundraising trail.
Her campaign finance reports show how lucrative it is. She has raked in well over $3 million in contributions to her main campaign account since May. About 80 percent of the approximately 19,300 donors listed in her campaign finance report are from out-of-state.
She has spent freely during the general-election campaign, dropping about $362,500 on postage and another $934,000 for printing. Consultants cost about $322,000 on top of nearly $385,000 in salaries. Advertising was about $1.83 million.
Ads targeting Smith account for a good portion of the spending.
She has about $6.2 million remaining in her main campaign account, which is one of several. At the federal level, she also has the Noem Victory Fund, which is where the big donors contribute.
That Victory Fund took in more than $3 million over the past couple of years, with South Dakotans contributing only about 20 percent as donors around the country provided the rest.
One can understand why she spends so much time at out-of-state fundraisers. Who needs South Dakotans?
But Noem’s consultants apparently believe she needed the last-minute, attention-grabbing headline of championing the grocery tax repeal.
“It is unusual for her to say that,” Schoenbeck said. “That is what the Democrats have always said. We Republicans have always paid attention to fiscal responsibility.”
Until late September, Noem had taken that position as well, but something changed.
“My position has never changed nor has the Republican Party position ever changed (regarding fiscal responsibility),” Schoenbeck said. Repealing sales tax as Noem proposes “would require a lot of legislators to change their position. Mine won’t change. I am still the fiscally responsible guy.”
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