PIERRE, S.D.(SD News Watch)- Gov. Kristi Noem plans to deliver her budget address Tuesday at the South Dakota State Capitol in Pierre, outlining her economic vision with an eye toward the next stage of her political career.

It’s natural for governors to emphasize the positive in these circumstances, but legislators might not have that luxury at a time when lagging state revenue and rising expenses signal significant belt-tightening for the 2025 session, where the budget for fiscal year 2026 will take shape.

“I don’t envy the governor’s position in putting out this budget,” said Rep. Will Mortenson, who served as Republican House majority leader the past two years. “If you’re someone coming into this session planning to create some big new government program or spend a bunch of money in a new way, you’re going to be in for a rude awakening. We’re just not going to have the money.”

That’s a marked contrast to the “foot on the gas” mantra pushed by Noem the past few years, when federal stimulus money and inflation-fueled sales tax receipts fattened state coffers.

Last year’s budget proposal for fiscal year 2025, largely adhered to by the Legislature, called for $7.3 billion in spending, an increase of nearly 30% from two years earlier.

After budget increases to the big three – education, health care providers and state employees – ranging from 5% to 7% the past three years, a more modest hike is expected for FY 2026 due to flat overall revenue, prison construction costs and a larger state share of Medicaid payments.

You can listen to the budget address at 1pm on KSDN.

Read the full story at www.sdnewswatch.org.