Noem seeks relief for employers, families in State of State speech

Gov. Kristi Noem said Tuesday she wants to save employers $18 million worth of contributions to the state unemployment fund, while announcing other new proposals and reiterating her support for previously announced plans as she delivered her annual State of the State address at the Capitol in Pierre.

“For four years we have made South Dakota the state where anyone can build their American Dream,” Noem said.

The South Dakota Legislature will consider her proposals during the 2023 session, which also began Tuesday and continues until March.

Noem said the unemployment trust fund balance is healthy enough to cut unemployment tax rates. She credited South Dakota’s actions during the pandemic with keeping unemployment lower than other states.

Noem said she wants to extend state employees’ family leave benefits to 100% of their salary for 12 weeks, from 60% of their salary for eight weeks. She also wants to allow private-sector companies to be a part of the state’s risk pool, she said, making it more affordable for them to offer similar benefits to their own workers. She said her budget includes $20 million in grants to incentivize private-sector participation.

Noem’s inaugural address: Read, watch the speech

Additionally, the governor is recommending up to $25,000 for state employees to cover the cost of adopting a child domestically.

And to help children in foster care, Noem announced the Stronger Families Scholarships proposal, which would offer any child in the foster care system up to $4,000 for their K-12 education. The money could be used to pay tuition at a private school, pay for tutoring or teaching services, purchase curriculum, and more, Noem said.

The speech also touched on the shortage of affordable child care in the state. Noem announced her office is overhauling child care rules and regulations and partnering with the South Dakota Farm Bureau to help child care providers offer benefits to employers. She did not provide further specifics on the Farm Bureau plan.

To help alleviate a shortage of workers statewide, the governor is proposing the state honor more types of business licenses from other states – meaning a license from another state would be valid in South Dakota.

“When other states have done this, they have seen their workforces grow almost immediately,” Noem said.

Noem mentioned prior efforts to recognize health care licenses from other states but did not specify what professions she wants to target next.

“We have an opportunity now to finish the job and provide a path to recognize the licenses of just about every profession in the state,” she said.

The governor also touched on policies she has previously announced and spoken at length about, like a board to vet foreign ownership of ag land and eliminating the state sales tax on groceries.

“Our economy is the strongest it has ever been. Our revenues continue to grow,” Noem said. “Now is the time, let’s get it done.”

Eliminating the state sales tax on groceries would cut about $124 million in tax revenue annually, according to the Legislative Research Council.

The state can afford to cut taxes because of high revenues, according to Noem. She said December 2022 revenues were up another $10 million above estimates.

Some of Noem’s measures have Democratic support, said state Sen. Reynold Nesiba, D-Sioux Falls.

Noem pairs big cut with big spending in budget plan

“Democrats are eager to work with the governor to cut the sales tax on food,” said Nesiba, who noted he’s been advocating a repeal of the food tax for 19 years, prior to Noem announcing her support for it during her 2022 re-election campaign.

Nesiba also criticized some aspects of the speech. He said Noem should devote even more attention to child care and said South Dakota is the only state without an early education council, and one of a handful of states with no state aid to fund early education.

“If we are going to have affordable, high-quality child care that pays a living wage, then the state is going to have to step up and do its share,” Nesiba said.

Noem took a detour away from state issues in the speech to express frustrations with the White House.

“We would be growing even more if there weren’t federal mandates preventing companies from coming,” Noem said.

South Dakota Democratic Party Chairman Randy Seiler put out a statement criticizing Noem’s national focus, citing a recent media report that she’s considering a run for president.

“Even though Governor Noem was just reelected to serve the people of South Dakota, it seems she already has her eye on the next job, and her State of the State address reflected that,” Seiler said.

Not all of the speech was political or policy-oriented. Noem announced the recipients of her Governor’s Award for Heroism: the staff at Avera Avantara nursing home in Salem, who protected their residents from the derecho that hit last spring, and South Dakota Air National Guard Staff Sgt. Mark Kock, who rescued a person whose car had flipped and was flooding with water.

The first week of the legislative session continues with more speeches by other officials, including the State of the Judiciary speech on Wednesday and the State of the Tribes speech on Thursday.