South Dakota lawmakers boost state aid to education and state workers by 7% and cut the sales tax

The South Dakota Legislature passes a sales tax cut and a seven-percent increase for K-12 education and state employees. They wrapped the regular run of the 2023 session Thursday evening.

House Majority Leader Will Mortenson of Pierre says education is a core priority and this is the biggest annual increase for education since the sales tax was increased to boost teacher pay. He says there will also be significant increases for Medicaid providers.

The tax cut is a drop in the overall state sales tax from 4.5 to 4.2 percent for four years. Assistant Senate Majority Leader Mike Diedrich of Rapid City says giving it a sunset date was the fiscally responsible thing to do since they don’t know how the economy will react once the federal pandemic dollars dry out. Lawmakers says the cut, worth about $104 million, is the largest tax cut in state history.

The budget also includes funding for a third straight year of a tuition freeze for students at the state’s universities and tech schools.

March 10, 2023