“South Dakota is working,” Gov. Dennis Daugaard likes to remind the state’s residents.
Amid the announcement of another lean budget year due to disappointing sales tax collections, Daugaard on Tuesday explained South Dakota will continue to be fiscally responsible, a feat the Republican governor has taken pride over for years.
“Maybe we’re not able to fulfill all our wishes, but I would say we are still fulfilling our needs,” Daugaard told The Associated Press on Monday.
It’s a good motto many South Dakotans live by — needs before wants and wishes. That mentality has kept South Dakota in good financial standing even during difficult times when projections fall below expectations.
Rather than farmers buying new tractors when income is down, they usually fix what they have. And while we think the agriculture economy — which has a significant influence on the state’s budget — will eventually rebound from its down cycle, we worry more about a less-noticeable trend hampering South Dakota’s economy.
The lure to go online and order merchandise is playing a major influence on why we continue to have lean budgets in South Dakota. More people are spending money online, which takes funds directly away from public schools, state government and municipalities because web sales typically don’t account for sales tax.
Money from the state's sales tax is 63 percent of South Dakota's state general fund revenue, but an increase in online spending in recent years has put a strain on the budget. According to the U.S. Census Bureau, national e-commerce retail sales have increased 245 percent over the past 10 years, growing from $113.3 billion in 2006 to $391 billion in 2016.
As the budget address is still fresh in our minds, we recognize this is one of the most important times of the year for retail stores due to holiday shopping. Mitchell Area Development Corporation Executive Director Bryan Hisel said some retailers take in up to 60 percent of their revenue between Thanksgiving and Dec. 31.
“Our local school system, our local county and our local cities depend on you, each of us, making a commitment to try and purchase our merchandise in South Dakota and in your local community,” he said Wednesday.
So, as you consider all the gifts you want to purchase this holiday season, think of what South Dakota needs during this lean budget time.
We need to support local businesses by avoiding online sales. Doing that supports South Dakota.