As the COVID-19 pandemic spreads through South Dakota so does its potential negative economic impact on city and state budgets. Gov. Kristi Noem has already said in at least one news conference that in June, the Legislature would address sales and use tax revenue losses.
“The sales and use tax is the single largest revenue source for the state’s general fund and accounts for approximately 63% of ongoing general fund revenue,” said the state’s governor’s summary of the fiscal year 2021 budget.
City and state officials expect sales and use tax to decline because of physical social distancing and limits on customer counts in restaurants and bars, a loss of retail sales as some stores have closed or changed hours and spending habits change.
If the COVID-19 pandemic is waning by July and August it’s conceivable that sales and use tax revenue could start bouncing back from the expected downfall in March, April, May and other subsequent months.
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by rae yost
april 7, 2020