PIERRE — Gov. Kristi Noem’s message of improved state revenues may mean more funding for key priorities, area South Dakota legislators said.
Noem delivered her “State of the State” address Tuesday afternoon, officially kicking off the 2020 legislative session. Her speech carried a pro-growth message with an emphasis on helping and/or attracting businesses.
In addition, the governor touched on a number of initiatives designed to upgrade the state’s infrastructure and to improve its quality of life.
Given the improved South Dakota sales-tax revenues, state lawmakers are looking at increased funding for education, Medicaid providers and state employees. Those three areas did not receive increases in the governor’s budget address last month.
District 18 Sen. Craig Kennedy (D-Yankton) viewed Tuesday’s speech as a general statement without many details.
“The State of the State address was a very broad, high-level overview of what the governor sees as the current status of South Dakota, and where we may be heading,” he said. “There were few specific proposals for legislative consideration.”
Kennedy did find optimism in the higher sales-tax revenues compared to last month’s budget address.
“The governor stated her top priority was providing funding increases for teachers, Medicaid providers and state employees, if revenues will support that during the year,” he said. “Hopefully, the Legislature will be successful in, at the very least, following the commitments we previously made.”
District 18 Rep. Ryan Cwach (D-Yankton) echoed a desire for more dollars in those areas.
“I was glad to hear that the governor is committed to increasing funding for these priorities with the stronger December revenue outlook,” he said. “Of course, we have 34 more days to negotiate the size of those increases.”
District 18 Rep. Jean Hunhoff (R-Yankton) found many familiar themes in the State of the State address.
“The governor’s speech was typical of her predecessors. She highlighted her efforts on working together in creating opportunities for the future for our children and families to stay in South Dakota,” Hunhoff said.
“Her focus this past year and for the next year is creating an economic climate that will foster migration of business to South Dakota. She many times during her speech alluded to the fact that she has made traveling the state and visiting with our citizens a priority in gleaning from them what will create that economic desire to be in South Dakota.”
Cwach alluded to Noem’s proposals for the Revolving Economic Development and Initiative (REDI) Fund.
“I think it was appropriate for the governor to highlight the positive impact the REDI Fund can have on housing,” he said. “The REDI Fund has been a good program, and I’m looking forward to learning more about plans to develop our housing markets.”
Hunhoff sees the housing proposal potentially producing a chain reaction of other benefits.
“(The governor’s) new initiative is to use the REDI Fund to address housing needs by allowing private for-profit and not-for-profit (entities) to have access to resources for multiple family housing,” Hunhoff said. “This could be used both in rural and urban communities for recruiting a workforce.”
In addition, Cwach believes the governor’s emphasis on improved Internet access will benefit South Dakota’s economy and quality of life.
“I think there is a lot of the governor’s address that will improve South Dakota,” he said. “Rural broadband access is important, and we should continue efforts to expand it. As a former farm kid, I personally can relate to the frustration caused by no internet or slow internet.”
Other lawmakers also pointed to Noem’s initiative for better broadband service.
District 17 Sen. Arthur Rusch (R-Vermillion) noted the governor’s report that the 2019 Legislature’s approval of $5 million for high-speed internet service has resulted in $25 million of internet improvements. “She hopes to see more funding for that this year,” the senator said.
Noem’s address reminded South Dakotans that their state government does not share the budgetary woes found in a number of other states, Rusch said.
“Governor Noem emphasized South Dakota’s present financial situation, which is better than many states,” Rusch said. “She talked about South Dakota’s AAA credit rating and our state pension fund, which is fully funded. That pension fund also provides pensions for city, county and school employees, so their pensions are also protected.”
District 16 Rep. Kevin Jensen (R-Canton) observed the governor’s address seemed well-received by legislators. He was pleased to see the prospects for increased funding in certain budget areas.
“While there were no major surprises in her proposals, I was pleased that there will be support for some education and state employee funding increases,” he said.
“During this first day, many legislators were visiting about the lack of funding for education and other key areas, but those concerns were eased a little today.”
District 19 Sen. Kyle Schoenfish (R-Scotland) pointed to the governor’s emphasis on growth and economic development.
“South Dakota continues to be one of the best states to do business, in part because South Dakota’s elected officials continue to support pro-business policies like low taxes and low regulations,” he said.
“Topics mentioned (in the address), like broadband, workforce housing and habitat are areas that still need improvement. Different pieces of legislation that passed last year have started to make progress in those areas.”
Jensen found many of the same themes in the State of the State address.
“South Dakota truly is a great place to live and start a business,” he said. “It’s refreshing to hear that we are not only interested in bringing new businesses into the state, but the governor wants to find ways to assist existing business in growing and creating new jobs.”
District 19 Rep. Kent Peterson (R-Salem) pointed to the governor’s proposals for value-added agriculture.
“One of the priorities I was most excited about was the bio-processing initiative and what that can become,” he said. “We have all of the components to make South Dakota the world leader for bio-processing, and with a public-private partnership, we can make that happen.”
Noem has always made agriculture a priority, Hunhoff said. “(The governor) talked about bioprocessing and how it will be an economic driver for our ag producers,” the lawmaker added.
In another agricultural development, Cwach noted the governor’s apparent willingness to consider approval of industrial hemp after initially opposing it.
“I’m glad the governor is open to supporting industrial hemp; however, all four of her necessary guardrails were in last year’s legislation,” he said. “We lost a year to develop an industrial hemp market over concerns that were either addressed already or the Legislature gave the South Dakota Department of Agriculture authority to regulate, including hauling permits.”
Rusch pointed to other agricultural initiatives in Noem’s address.
“The governor talked about her hopes for further agricultural development in South Dakota and that fact that she will be in Washington D.C. (today), along with representatives of the South Dakota soybean and pork producers, to be present when President Trump signs a new trade treaty with China that will encourage export of those products.”
For rural areas, Noem’s emphasis on hunting and tourism dollars helps bring a major influx of new dollars, Jensen said.
“We are a state that relies heavily on hunting and tourism dollars,” he said. “Keeping our state as the ‘Pheasant Capitol of the World’ may not seem important to some, but the dollars spent by hunters help the smaller communities stay in business.”
In addition, Noem recognizes the agricultural community is suffering, which impacts rural areas, Jensen said. “Even more than hunting, the local farmer helps keep the small community vibrant and stable. We all are aware of the challenges facing farmers today,” he said.
Jensen also supports working to increase the number of foster parents in order to give those children a stable home environment.
“We seem to always want to discuss workforce development, but sometimes I believe we are a little short sighted and need a more long-term view,” he said. “Who is our next generation of people entering the workforce? Today’s children are those future workers. Having a stable home life helps them be successful in school and other endeavors.”
In addition, Jensen applauded the governor’s focus on mental health and addiction issues, which he believes will benefit the state as a whole.
“These people are the workforce of today,” he said. “Everyone deserves a chance for a productive life.”
Cwach pointed to one area he found lacking in the State of the State address.
“Overall, I thought it was a good speech, but I was disappointed that the governor did not mention health care or long-term care,” he said. “We can lower health care costs through a medical re-insurance program that Republican and Democrats have supported in other states. Health care costs are high, and there are opportunities to save South Dakota families money.”
In the end, Noem used her address to lay the groundwork not only for 2020 but for the long term, Hunhoff said.
“(The governor’s) message followed her budget priorities and strategic focus on families first to live their dream of staying and/or coming to South Dakota for the good life,” the legislator said.
“This governor is changing the lay of the land in Pierre. She isn’t satisfied with the status quo, and she’s looking at innovative opportunities to make the changes for a forward South Dakota.”
The Press & Dakotan sought reaction from District 16, 17, 18, 19 and 21 legislators.
Follow @RDockendorf on Twitter.