Gov. Kristi Noem hesitant to sign budget with temporary tax cut

The governor has three options: Sign it, veto it or do nothing, in which case it becomes the law without her appproval.

South Dakota Gov. Kristi Noem gives remarks before signing a bill limiting "frivolous" nuisance claims on Wednesday, March 15, 2023, in Mitchell.
Adam Thury / Mitchell Republic

MITCHELL — Gov. Kristi Noem again floated a veto of the state budget in her criticisms of the priorities approved by lawmakers in an overwhelming vote last week.

Framed by farming equipment at C&B Operations in Mitchell during a signing ceremony for a bill limiting “frivolous” agricultural nuisance claims, Noem’s comments on March 15 came during her first extended discussion with in-state press since the end of the 98th legislative session last week.

Barring any here-and-there vetoes, the lone layover from the legislative session is what exactly Noem plans to do with the state budget.

“I still believe the people of the state deserve a permanent tax cut,” she told reporters. “So we're evaluating that. It's really hard to put my signature on a bill that doesn't bring that kind of relief.”

On March 9, lawmakers finalized a state budget that increases funding to education and state employees by 7% and care providers by 5%, though larger increases are scheduled for several provider categories.


The budget also includes a four-year cut to the state sales tax, bringing the overall rate from 4.5% down to 4.2%, a move expected to return just over $100 million to taxpayers next year.

Noem repeated her disappointment with lawmakers opting for a temporary overall tax cut rather than her preferred grocery tax cut and increasing budget levels over her proposed 5% across-the-board increase.

“If they were going to spend that kind of money, they surely could be palms up and say that the taxpayers deserve to keep a little bit of their money, too,” Noem said, calling the four-year tax cut a “tax holiday.”

But legislative leadership has repeatedly pushed back on Noem’s attempts to distance herself from the budget.

“In February, both the Governor’s staff and the Legislature’s economists advised us that revenues were continuing to come in strong, so we could afford to give teachers, nursing homes, and state employees a little more funding,” Mortenson wrote.

Otherwise, lawmakers had adopted the “governor’s recommended budget,” Mortenson argued.

Moving forward, Noem has three options: sign the budget into law, veto the budget or do nothing, in which case the budget would become law on March 24.

She could also separately veto or take no action on the overall sales tax cut on the same timetable.


“These legislators have the opportunity to do anything on veto or during a special session, too,” Noem said.

Nuisance law aimed at environmental groups

Currently, nuisance lawsuits in the state are quite broad, covering any action that “annoys, injures, or endangers the comfort, repose, health, or safety of others.”

House Bill 1090, sponsored in the Senate by Republican Sen. Josh Klumb, of Mitchell, would limit standing in these nuisance claims to an owner or lessee of “real property” within one mile of the “source of the activity or structure alleged to be a nuisance.”

The bill would also raise the bar for evidence in a nuisance lawsuit, as plaintiffs would have to bring “clear and convincing evidence” that the damages arise from actions that do not comply with existing regulations.

Noem made clear that state, county and city requirements still stand and that the bill is not a free pass for agricultural operators.

“All we're saying is who can file a claim and who can't,” she said. “We want it to be someone that is in that area and has been impacted by that ag operation.”

In pushing for the bill, Noem and other advocates have consistently framed certain lawsuits against agriculture operations, especially those by environmental groups, as damaging to the wider economy.


“[Environmental activists] don't necessarily care where our food comes from or how it's produced,” South Dakota Farm Bureau President Scott VanderWal said. “They’ve got their own separate agenda.”

“The Biden administration hasn't done enough to keep Americans safe," the governor said during her remarks, positioning South Dakota as an example of how states can protect American interests.

Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or

Jason Harward covers South Dakota news for Forum News Service. Email him at
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