Noem speaks out on grocery tax, promises to repeal it

SIOUX FALLS, S.D. (AP) — South Dakota Gov. Kristi Noem made a campaign promise Wednesday to repeal the state’s tax on groceries, changing course to lend outspoken support to a bipartisan proposal she did not publicly endorse in March.

The Republican governor made the announcement two days ahead of a Friday debate with her Democratic challenger Jamie Smith, a state lawmaker who pushed the repeal of the 4.5% tax on groceries for years and helped broker a bipartisan vote to pass it in the House this year.

Noem billed the campaign promise Wednesday as “the largest tax cut in South Dakota’s history,” saying it would push $100 million “directly to families to help them with their budget.”

But Smith said the campaign promise was “just another example of Gov. Noem trying to manipulate the voters of South Dakota by proposing a policy she clearly didn’t believe in and is doing it for her political gains at this moment.”

A spokesman for Noem’s campaign, Ian Fury, said that Noem had privately voiced support for the grocery tax cut bill to Senate leadership during budget negotiations. At the time, Republican Sen. Lee Schoenbeck, one of the most powerful lawmakers in the chamber, had said the House proposal was dead on arrival in the Senate. He said in a text message that he remains opposed to the tax cut.

Schoenbeck also told The Dakota Scout that Noem, even in a private conversation in March, was “adamantly opposed” to the House proposal.

The state House passed several tax cut proposals this year, but they did not make it through the Senate. When the House passed a bill to scale back the state’s sales tax in February, Noem urged caution and said the state’s economy likely faced “some challenges ahead.”

Noem has insisted she wanted to cut taxes, but her proposals in this year’s legislative session were more modest. A proposal to cut the state’s bingo taxes and fees was enacted, but that represented less than $40,000 in annual revenue.

“She’s always in favor of cutting taxes if the numbers work,” Fury said.

At a news conference at a grocery store Wednesday, Noem blamed President Joe Biden for inflation that has driven up the costs of groceries and said her proposal would bring “relief to our families.”

Economists say the twists and turns of the pandemic, as well as a flood of emergency government spending, under both Biden and former President Donald Trump, overstimulated the economy.

Noem has made the economic health of South Dakota a central point in her campaign, saying it’s a credit to her decision to forgo most government restrictions during the pandemic. The state has set a record amount of money aside in its budget reserves.

But when the South Dakota House passed the cut to the tax on groceries in March, it was Smith who cheered the proposal as a way to alleviate a tax that weighs heaviest on low-income people.

“Raw food — everybody needs it and you don’t have a choice,” he said at the time.