South Dakota voters are being asked to decide if they approve of what is believed to be the largest tax increase in the state’s history. Initiated Measure 15 on the November ballot calls for a permanent 25 percent sales tax increase to pay for two specific programs.
The measure increases the state sales and use tax from four cents to five cents on nearly everything you buy, which would take an estimated $180 million in additional tax dollars from South Dakota taxpayers. IM15 locks in the permanent tax increase for two special interests, K-12 education and Medicaid, on top of what is already being spent for those two programs.
Proponents are asking South Dakotans to give them an additional $180 million every year to help pay for $77 million cut from their budgets two years ago. That was at a time when the state’s financial outlook required difficult budget choices among all of state government. Since then, the Legislature has taken steps to begin restoring those cuts. IM15 is a permanent tax to a temporary problem.
This idea is defective for several reasons.
First, now is not the time to take another $180 million out of taxpayers’ pockets. The state just ended its fiscal year with $48 million in savings and unexpected revenues. We are experiencing the worst drought in decades, which affects everyone from farmers to families to main street businesses. We are facing the possibility of dipping into another nationwide recession, and there are grave concerns about our staggering federal deficit.
Second, putting dedicated tax increases on the ballot circumvents the Legislature, removing elected leaders from the decision-making process. This sets a flawed precedent for future tax policy. Our governor and citizen Legislature have consistently demonstrated the ability to develop a balanced state budget which meets the needs of our state and its citizens.
The proposed increase in sales tax has no expiration date. It could not be used for other needs the state may face in the future. NONE of the money is allowed to be spent on public safety, higher education, public infrastructure and other things to improve South Dakota’s quality of life.
IM15 is the wrong way to set permanent tax policy. We would all benefit from a larger conversation - one involving the governor and the Legislature - about how to make sure our tax structure is stable, fair, affordable, and funds ALL the priorities for the state of South Dakota.
Mike Held and Shawn Lyons are co-chairs of the “No on 15 Committee.” Mike Held of Huron represents the South Dakota Farm Bureau. Shawn Lyons of Pierre is executive director of the South Dakota Retailers Association.