PIERRE — Gov. Kristi Noem used her second State of the State speech to lay out her vision for growing the state’s economy, touting the potential of a home-grown cybersecurity force and a continued focus on programs to broaden the state’s agriculture industry.
As lawmakers mull a tight budget this year, the Republican governor kicked off the legislative session by calling them to consider the “next generation.” She said her solution to the state’s perennial budget crunch is to grow the state economy.
The Republican-dominated Legislature broke into applause when she said she would not be raising taxes.
Noem acknowledged that the state is highly dependent on agriculture and that last year’s flooding was especially tough on farmers. She said that President Donald Trump’s recent progress on a trade deal with China was good news for the industry. The governor plans to be in Washington, D.C. tomorrow for Trump’s signing of the deal.
House Majority Leader, Lee Qualm, R-Platte, is a farmer and said the last year was the toughest that he’s ever seen with low commodity prices and record-level amounts of precipitation. He acknowledged that Trump’s actions on trade negotiations have hurt his farm business this year, but felt it was the right move to get a better trade deal with China.
The governor reiterated that she does not think that industrial hemp in the state is a “good idea,” but said she would not veto a hemp bill if it tightly regulates the crop. She said she hopes it passes early in the session.
Qualm is sponsoring the hemp bill and said he hopes it passes the House before the end of next week.
The governor also pointed to an opportunity for the state to develop a cybersecurity industry with a research network being developed at Dakota State University. She called on the state’s universities to continue to develop the next generation in agriculture technology like developing new ways to turn crops and livestock into usable products.
The tourism industry has also grown for the past nine years, according to the governor. She said it was important that the state preserve pheasant habitats to continue to attract hunters to the state.
The state’s economic growth has lagged behind the nation’s this year and the Legislature is working on how to balance a tight budget.
Noem said she wants to find “extra flexibility” in the budget to fund pay raises for teachers, state employees, and medical providers. The governor did not recommend pay raises to match inflation in her December budget proposal, but said that since then, revenue has been slightly higher than estimates. The state would need to find about $16 million for each percentage point that it raises pay.
In a press conference after her speech, the governor said she wanted the Legislature to prioritize the pay increases if revenues were high enough. She acknowledged that the statutes require the funding increases but said she would let the Legislature decide on the issue.
Democrats said Noem’s message on attracting businesses to the state is not new and would not be effective if the state doesn’t prioritize funding for education and social services.
“Businesses aren’t going to come here if we don’t fund education properly,” Senate Minority Leader Troy Heinert, D-Mission said. “These issues go hand-in-hand.”
The governors also touted some of her accomplishments from the last year, including funding the expansion of broadband to rural areas and pushing initiatives for greater transparency in state government.
Legislators chuckled when Noem mentioned the controversial “Meth. We’re On It.” campaign. She acknowledged that some people did not like the tag-line. Noem wants the Legislator to fund addiction treatment and law enforcement to address meth.

Noem 2020 State of the State Address
Noem’s address as prepared for delivery:
Lieutenant Governor Rhoden, Mr. Speaker, members of the legislature, Chief Justice Gilbertson, Justices of the Supreme Court, constitutional officers, and fellow South Dakotans. It is my privilege to stand before you today to discuss the state of our state.
Just 14 days ago, we turned the page not only on a new calendar year, but also on a new decade. And today, we kick-off a new legislative session. Last year, we found so many ways to work together to give greater freedoms to our people, promote our outdoor heritage, and restrict the endless expansion of government into our daily lives. This year, it is my hope that we will find even more opportunities to work together – advancing commonsense solutions to the problems we can solve on behalf of the people of this great state.
One of the things I was taught as a kid was that you don’t just complain about things; you work to fix them.
And as this year’s session starts, we must keep in mind that we are looking, not just at the short term, but at the long term too.
Fifty-nine years ago, almost to the day, President Eisenhower, in his farewell address, warned the nation to avoid the impulse of living only for today. He spoke candidly about how wrong it would be to mortgage the future of our grandchildren because it would lead to the loss of their political and spiritual heritage. He said, “We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”
As you may recall in my inaugural address, I told you about my desire to be a governor for the next generation. The north star that guides my every decision is the impact a policy, a piece of legislation, or program will have, not only on South Dakotans today, but also on the next generation.
I grew up with a Dad who dreamed of all four of his kids being able to stay on the family ranch if they wanted to. My vision for South Dakota is the same. We must ensure that every South Dakotan can build their life here and make a good living, so they can provide for their families and maintain our traditions and way of life. This is why I am committed to four pillars of protection for South Dakotans: keeping taxes low, limiting government regulation, fighting government intrusion, and keeping government open and honest.
With a year under our belt, I’m proud to stand before you and say we accomplished a lot in 2019, and we did it all without raising taxes and without spending more than we took in. And unlike Illinois, New York, and many other states, we are seeing a net increase in our population. Why? Because Americans are looking for the opportunities that present themselves in states that encourage self-government like we do here in South Dakota.
And to all the business prospects we’ve been recruiting, I’d like to make the case here and now about why you should join us in South Dakota.
Anyone who has spent time here realizes what great people we have in South Dakota - our work ethic and values are second to none.We don't have a corporate income tax.  And there’s also no business inventory tax. For our hard-working residents, we are one of the few remaining states with no personal income tax - and I am committed to keeping it that way.We don't burden our citizens with a personal property tax or an inheritance tax.
The taxes that we do have to fund state government are stable and predictable. In addition to my commitment to not raising taxes, our constitution requires a 2/3rd vote in both chambers to raise taxes. In short, if you’re worried about tax increases, you needn’t be – your business is safe here.
Government in South Dakota lives within its means. We balance our budget without accounting gimmicks or tricks.
I'm proud of our AAA credit rating, and our state pension plan is fully funded. That means businesses that move here don't need to worry about surprise charges, fees, or taxes to make up for an unfunded pension plan like our neighbors in Illinois.
In South Dakota, we believe in smart regulation. We roll out the red carpet, not the red tape.
Our part-time legislature is one of just a few that is a true citizen legislature. Our legislators come to Pierre, tackle the problems that need to be tackled that session, and then go home to their jobs, their families, and their communities.
Our state parks and outdoor recreational opportunities are second to none.  There's a reason we are the pheasant capital of the world.
I have traveled all across this country and around the world, and I can tell you, there is no better place to operate a business and raise a family than in South Dakota.
For employers and employees alike, my goal is to make sure folks across the country and around the world know that South Dakota is THE PLACE to do business. Whether you’ve owned and operated a business for four generations, or you’re looking to start or even relocate your current operation, I want my message to be crystal clear: South Dakota is OPEN for business.
In the next few minutes, I’m going to walk you through some of the specifics of what we were able to accomplish this last year and what we’re looking to do in 2020 and beyond.
A priority of my administration has been to open up South Dakota’s government and make it more accountable, more accessible, and the most transparent it has ever been. It was Thomas Jefferson who said the whole art of government is honesty. He was right. A government that cannot be trusted by the people is no longer serving one of the primary purposes of government: to preserve the blessings of liberty.
We have taken many steps over the past year to advance this important goal.
As I highlighted in the budget address, we expanded the capabilities of Open.SD.Gov.
We took to heart the importance of fact-based reporting as a key component of holding government accountable, so I asked for a reporter shield law and – together – we got that done.
We took advantage of free technology like YouTube and Facebook Live to bring information directly into the living rooms of South Dakotans. And we are currently working with the Municipal League and local governments to find a way to get their meeting materials online like we do at the state level. In other words, we are making participation in government easier for every South Dakotan, and modern communications tools are incredibly helpful to open government in a state as large as ours.
It is my desire to be the most connected governor the state has ever seen. This includes bringing my administration to every corner of the state and advocating for our great state all across the country. Over the course of this first year, we held official events in nearly 30 counties. I sat down and strategized with hundreds of business leaders. I have visited with teachers, soldiers, farmers and ranchers. And, at the request of the Department of Tourism, I helped promote South Dakota’s brand and footprint throughout the nation and globally at the Macy’s Thanksgiving Day Parade.
My team is also working to provide our communities – even the most remote ones – the tools they need to be connected.
In America’s early days, mail was delivered via post road. The Founders thought communication was so important to the business of the people and the nation that they included a provision in the Constitution to allow for the government to establish post roads. Well today, in the modern economy, technology allows for the transportation of goods and services by way of a whole different kind of post road – the internet. We want to create an environment where people aren't forced to choose between the modern economy on the one hand, and life in their hometowns on the other. We must make sure our people can harness the latest technology to take advantage of what has become the modern equivalent of a post road.
Along those lines, I stood before you last year and told you we needed to set goals as a state to bring our homes and businesses up to a satisfactory level of broadband access. I outlined a plan to do so, so that more South Dakotans than ever before could be connected to high-speed internet. I told you we couldn’t do this alone – that we had to bring industry leaders to the table to help us identify our gaps and outline a plan to bridge them.