MITCHELL, S.D. — Though the South Dakota legislature can often become a playpen for cultural issues, those matters appeared far from mind among some two-dozen Mitchell-area voters who heard from their delegation for the first time since the legislative session kicked off.
Sen. Josh Klumb, entering his seventh year in office; Rep. Lance Koth, entering his fifth; and Rep. Ben Krohmer, who had just finished his third week in office, led the hour-long discussion on the morning of Jan. 27 in the Mitchell Chamber of Commerce, the bulk of which became a thousand-foot overview of taxing and spending issues at the state and county levels.
Due to his experience on the Joint Appropriations Committee, which has spent the past three weeks beginning to delve into the thousand-piece puzzle that is the state budget, Koth did much of the heavy lifting during this portion of the meeting.
Assisted by residents concerned that proposed tax cuts could further hamper the ability for schools, counties and municipalities to deliver services, Koth explained his high-level fears that the impulse from the governor and dozens of lawmakers to cut taxes could stem from a misreading of the state’s economic health.
“I don’t want to be a gloom-and-doomer, however, I’m very concerned. Since 2020, there has been $13.6 billion in federal stimulus money dumped into our state. That money hasn’t all been distributed, but you take that and compare that to a general fund of $2 billion,” Koth said. “We’re a consumption tax state. That money, a lot of it, has already flowed through the system. The concern I have is that our baseline from which we will project revenues, I believe, is too high.”
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During this analysis, Koth and company went through the three tax relief proposals currently making their way through the early steps of the legislative process: the $100 million grocery tax cut, a property tax cut worth some $80 million and a half-cent overall sales tax reduction worth $160 million.
“People deserve a tax cut, but a lot of businesses and people in this room have entities that depend on tax dollars to function. There’s the question: can we afford it? Because you can’t do it all, don’t dare do it all or we’ll be in a world of hurt. So how do we balance giving back to the people?” said Klumb, who is entering his final term in the Senate. “If we cut taxes and give back to the people, do we risk putting our state in a tough financial spot in the future where we may be forced to make the hard decisions?”
On the side of property tax, several people in the room expressed concerns that relying on the state to buttress the lost revenue to schools, as the proposal currently works, may not be wise, as in the past education has been one of the first things on the chopping block when revenues experience a downturn.
However, another concern, that municipalities and counties would also miss out on revenue, was somewhat misguided. As currently written, the property tax proposal only affects the school portion of the property tax levy. Separate statutes governing county and township property tax collections are left unaltered in the proposal.
Yet the widespread support for cutting significant taxes among the legislature as a whole — and, according to Koth, the staunch opposition from those in the “Freedom Caucus” to raising any other sort of revenue — was just half of what concerned the panel’s lone appropriator.
According to Koth, state spending on Medicaid and Medicaid providers such as nursing homes and disability services was set to grow from around $450 million this year to nearly $700 million in the 2026 fiscal year.
And, even then, the critical inflation facing these care providers — a reality Koth has heard from several different agencies in the early part of session — may demand even more resources.
“I don’t know where we’re going to get the money,” Koth said. “And who wants to pay more taxes?”
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Referencing the often zero-sum game of tax burdens and a constitutionally-mandated balanced budget, Klumb echoed the concern when Koth finished: “And who loses?”
Though this discussion of the potential for hasty tax cuts to put the state into a world of financial hurt down the line consumed much of the discussion, Craig Bennet, the Davison County veterans service officer, explained his support for several bills related to veterans issues, including a proposal to raise salaries for county veterans service officers across the state and an increase in state funding for placing headstones for deceased veterans.
“I think that’s a no-brainer,” Koth said of the second proposal, which increases state reimbursement for an individual headstone from $100 to $200 and is projected to cost the state around $52,000 annually if enacted.
As the legislative session rolls on, the three lawmakers implored attendees, and those who couldn’t make the Friday morning meeting, to remain in touch and engaged through email.
“I so appreciate when you share your concerns and, in addition to that, give some reason and rationale behind it,” Koth said.
Some ways to effectively stay engaged throughout the legislative session
How do I contact my representative?
Sen. Josh Klumb | Rep. Lance Koth | Rep. Ben Krohmer
How do I see what bills my representative is carrying or sponsoring?
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Where can I see every single bill?
By Bill Number | By Bill Subject
Some tips for discussing bills with your representatives:
- Know your bill number and include it in the email
- Check the latest action on the bill: If it was already deferred to the 41st legislative day, there is little they can do to help
- Know whether the bill is in the House (HB) or Senate (SB): If it hasn’t made its way over to the Senate yet, for example, Sen. Klumb is unlikely to be paying attention unless he is a sponsor, as legislators can’t follow everything at once
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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