The final week of the 2023 Legislative Session was not without some challenges. It is important to review the history behind the sales tax to understand the Legislature’s tax cut. In 2016 the SD Legislature passed HB1137 which increased the state sales tax to 4.5%. The tax had been 4% since 1969. Gov Dennis Daugaard asked for the higher tax to help raise teacher pay because SD was in last place nationally for teacher pay. 63% of the proceeds would go towards increasing state aid to education, 34% for property tax relief and 3% for raising instructional salaries at the technical schools. At that time the House vote was 47 Ayes which was the exact number needed for a 2/3’s majority. A key part of that bill was a promise made that “If the state can enforce obligation to collect and remit sales tax on internet sales, the additional net revenue from these sales shall be used to reduce the rate of sales tax. (The Partridge Amendment) HB1137 is a bill that will lower the sales tax from 4.5% to 4.2%. It passed in the House 70 to 0 and 31 to 2 in the Senate on Thursday. This will result in the largest tax cut in the history of the state of SD. The Senate added an amendment that includes a sunset clause which means the legislature will have to either remove the clause or vote again on the tax rate before July 2027. The legislature evaluates all the budget analysis every year and makes adjustments that are in line with South Dakota’s growth. This has allowed us to develop a budget that addresses our states obligations as we try to reduce taxes and give the people of SD more money in their pockets. Passing of HB1137 honors the legislatures promise made in 2016.

The legislature also kept tuition low for Tech School and University students. We funded raises for law enforcement and public safety employees. Earlier we deployed funds to encourage affordable housing. Emphasis was given to clean up absentee voting rules and having drop box security along with requiring rigorous testing and security of ballot counting machines.

Very important was the increased funding to nursing homes substantially and provided for mental health and suicide prevention programs with needed funding.

It is important that we meet our core obligation to the “Big 4”. 1) Provide $100 million relief to taxpayers 2) 7% increase for teachers and schools 3) 7% increase for state employees and 4) 5% increase to Medicaid providers plus movement to 100% methodology plus funded Medicaid expansion in total of over 10%.

We can meet these fiscal needs all while keeping true to South Dakota’s fiscal values.

The reserves in SD are still funded above 10% which positions SD for future growth.

There are many disagreements, but the unity seen this year in the legislature and especially when we came together to have an open, vigorous discussion and ultimately agreement on this budget. This shows our goals were the same, to meet the needs of the people of South Dakota.

The House and Senate will meet at 9 am March 27 to act on the vetoes from the Governor. It is always a very busy day, and I would encourage everyone to be aware of the process.

Please feel free to contact me if you have any concerns. My email is Rocky.Blare@sdlegislature. gov, which is one of the best ways to contact me.