PIERRE, S.D. — Sen. Lee Schoenbeck, the incoming President Pro Tempore, is looking forward to a friendlier session when the South Dakota Legislature begins its annual wintertime sprint in January.
“Compared to how it worked for the last two years, just based on what I'm seeing already, it makes me smile. I'm more optimistic going into this session than I have been for any in a long time,” said Schoenbeck, who has been in and around the legislative body for several decades. “And I mean optimistic in terms of not having to spend energy on parochial, unnecessary fights.”
One reason for that rosy outlook is a change in House leadership, as moderate Hugh Bartels edged out the more conservative option — last year’s second-in-command Jon Hansen — by a single vote. With Bartels and, consequently, other legislators considered more moderate in control of key leadership positions on committees such as House Appropriations, Schoenbeck says communication between the chambers has already improved.
“The people that make up House and Senate leadership are a group of people that respect each other, professionally and on an individual basis,” Schoenbeck, R-Watertown, said. “And we're all going to be friends when this is all done. Embarrassing one another would be viewed as unacceptable conduct.”
Although Bartels told Forum News Service he’s focused on attempting to “take away the wedges” in the House Republican caucus now under his leadership, the coming legislative session is already set to contain serious questions on the fundamental role of government — with issues ranging from how to deal with record revenues and reserves to whether to push onward on legislation related to abortion.
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How different sects of the Republican caucus answer these questions will come down to their personal placement on the wide ideological spectrum within the state's dominant party.
“Sometimes there's a mindset of, ‘This money is coming in, we’ve got to use it,’” said Rep. Aaron Aylward, the chairman of the South Dakota Freedom Caucus, a conservative subset of Republicans in both chambers. “And some legislators think of it that way rather than, ‘Okay, all this money is coming in. How do we provide relief to the people and allow them to keep more of this money so that they can make decisions on their own?’ Rather than the state making those decisions for them.”
Legislators say caucus rifts inevitable
The sheer size of the Republican caucus in the Legislature — taking up 94 of a potential 105 seats in the two chambers put together — makes disagreements an inevitability, some legislators say.
“When you have a large super majority one way or the other, it's just typical to divide and it's very common, even in other states,” said Sen. Erin Tobin, R-Winner, referencing conversations with legislators from other states at regional and national conferences. “And I think it comes down to the fact that we're going to have our agenda, what we were elected for and what we're representing for constituents. And if we don't necessarily have the other side to fight, we can tend to fight each other. Right or wrong, that just tends to happen.”
With his first key action of building the chamber’s committees, House Speaker Bartels says he made an effort to put experience before ideology. The placement of Hansen, his opponent in the speaker’s race, at the top of the Judiciary and Rules Review committees could also be seen as an act of goodwill.
“I looked at putting committees together by the experience of the members, their backgrounds, their knowledge, and where they would do the most to help the legislature,” Bartels said of his approach.
Whether Bartels has succeeded in that promise may be a matter of perspective. Rep. Chris Karr, R-Tabor, whose four-year stint as chair of the House Appropriations Committee will be broken in the coming session, felt differently.
“I'm not sure that the actions that we've seen so far — as far as little things like committee structure and appointment of chairs and vice chairs — I think that doesn't reflect the message of putting the past behind us and unity and putting the right people in the right position,” said Karr, who will still serve as a member of the committee.
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Replacing Karr and former Vice Chair Taffy Howard — who lost in a congressional primary challenge to U.S. Rep. Dusty Johnson — at the top of the all-important Appropriations Committee are two members who weren't in Pierre last session but carry strong experience: incoming Chair Mike Derby, who served as vice chair of the committee during part of the Bill Janklow gubernatorial administration, and incoming Vice Chair Tony Venhuizen, who served as chief of staff under both Gov. Dennis Daugaard and Gov. Kristi Noem.
Unity could give way to difficult questions on fundamental role of government
Though a professed optimism and sense of unity might be manageable in December, the gritty details of policy decisions with impact are waiting on the legislative horizon.
A primary example is how to handle tax relief, already poised to be a hot-button issue fresh from Noem's grocery tax-focused re-election campaign.
Schoenbeck said he believes a property tax proposal has the most legs, and he pointed to economic data from the Legislative Research Council from earlier this month as a potential reason for approaching any expensive, ongoing tax relief with caution.
“The fundamental flaw with either the [grocery tax or overall sales tax cut] is that we know now from the fiscal reports we've got that neither of them are sustainable,” Schoenbeck said.
In estimates from the Legislative Research Council provided to Forum News Service by Schoenbeck, while net sales tax revenue growth has hovered around a strong 12%, real growth over the 2022 fiscal year was estimated at just minus 1.8%, with an estimated 7% growth caused by inflation and federal stimulus each.
The negative growth is a departure from the picture painted by Noem during her budget address, which estimated permanent revenue growth at over $300 million.
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Still, some legislators on the conservative wing of the caucus feel that the right course of action is giving part of the state's record and growing reserves back to the people first, and then figuring out spending priorities from there.
“You’ll hear people say now isn't the right time to consider a tax cut or spending cuts,” said incoming Sen. Brent Hoffman, R-Sioux Falls. Hoffman is set to vice chair the Taxation Committee. “And my opinion is, it is always the right time to promote fiscal responsibility and to eliminate waste when we are looking at spending other people's money.”
One potential way to split the difference on interlocking taxing and spending issues could be aligning a tax cut with the expected time frame of continued operating surpluses in the state.
“We have surpluses, it's not state government's money. The surpluses need to go back to the people. And you do have to look at what is the sustainability of those surpluses,” Karr said. “And if [the surplus is] short term, then you look at a short-term tax relief option. If it's long term, and it's ongoing, sustainable, then we look at something as long term.”
But making sacrifices and offering tax cuts may become difficult when moving from the abstract to the concrete on issues like teacher pay, nursing home funding, expensive prison upgrades and many smaller projects that pockets of legislators may feel are necessary.
“All of these ideas are in conflict with each other. And so that's the hard work is how you allocate those priorities, because we can't be for everything,” House Majority Leader Will Mortenson said. “That's what they do in Washington, D.C., and that's why they run massive deficits.”
South Dakota's legislative session begins Tuesday, Jan. 10, with Gov. Noem's State of the State address.
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or jharward@forumcomm.com.
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