Cato Institute gives Noem a "C" on Fiscal Policy Report Card; cites opposition to sales tax cut

VIa Dakota News Now, Bluestem learned Noem receives a ‘C’ in tax and spending Biennial Fiscal Report.

That led me to the conservative libertarian Cato Institute's Fiscal Policy Report Card on America’s Governors 2022.

The Appendix B: Fiscal Notes on the Governors for South Dakota confirms Noem critics from both parties on her very recent campaign pitch for ditching sales taxes on food:

South Dakota

Kristi Noem, Republican
Legislature: Republican
Grade: C
Took office: January 2019

Kristi Noem was a member of South Dakota’s legislature and then served in the U.S. House of Representatives from 2011 to 2018. She is a conservative who supports South Dakota’s low‐​tax and competitive business environment. The state has the second‐​best business tax climate in the nation, according to the Tax Foundation.¹⁹⁵ And it is the fifth‐​freest state, according to Cato’s “Freedom in the 50 States” report.¹⁹⁶

South Dakota has no individual or corporate income tax. It raises 83 percent of state tax revenues from sales taxes, which creates a stable revenue base and encourages inflows of people and investment. IRS data show that South Dakota enjoys net in‐​migration, whereas neighboring Iowa, Minnesota, Nebraska, and North Dakota all suffer out‐​migration.

Noem expressed her policy approach in her 2022 state of the state address:

We are leading with freedom, limited government, fiscal responsibility, and a commitment to defending the values that have made our country great. I am proud to report that the state of our state is stronger than it has ever been in our 133‐​year history. This did not happen because of what government did. It happened because of what government did NOT do.¹⁹⁷

Noem’s middling grade on this report stems from a lack of tax cuts during a period when many other states passed large tax cuts. It is true that South Dakota already has low taxes, so fewer tax‐​code targets are available for a conservative governor to reform. That said, the state enjoyed a large budget surplus in 2022, but Noem leaned against a House‐​passed plan to cut the sales tax rate from 4.5 percent to 4.0 percent.¹⁹⁸ The Senate did not back the plan, so it did not reach the governor’s desk.

Noem has looked for modest ways to reduce the tax burden, such as cutting fees for starting new businesses, cutting fees for getting concealed carry permits, and eliminating taxes on bingo. She also has restrained spending and not sought any tax increases, so the Cato grade may not fully capture her fiscally conservative stance.

See Dakota Free Press's Schoenbeck Lying? Noem Campaign Still Insists She Supported Food Tax Repeal That Senate GOP Killed in March and Noem Afraid of Special Session to Push Promise of Immediate Food Tax Relief for more on that.

Related posts

• A tale of two states, two sales taxes: Jensen and Noem share very different campaign promises
• Special Report: How Kristi Noem rode shifting political winds to Pierre — & possibly back to D.C
• Positive pants on fire: Democratic opponent Jamie Smith corrects Noem's really bad math
• After swift recovery from spinal surgery, Noem heads out for bright lights, big bucks in AZ & FL 
• Positive pants on fire: Noem fibs about policy, keeps Corey Lewandowski at her side in DC
• What the hell was that? Governor Kristi Noem butt of Saturday Night Live cold opening schtick
• Jamie Smith will focus on South Dakota and shake hands with your dog while he's at it

Screengrab: From Cato Institute's Fiscal Policy Report Card on America’s Governors 2022.

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