SIOUX FALLS (AP) – A South Dakota conservative group plans to push lawmakers to fulfill a law calling for tax cuts after the state’s U.S. Supreme Court victory this year clearing the way for major new online sales tax revenues.
But Americans for Prosperity-South Dakota has a backup plan if officials don’t deliver: let voters decide in the 2020 election.
The organization backed by billionaire brothers David and Charles Koch is proposing a ballot question to simply phase in a half-cent sales tax cut over five years. The group wants the Republican-controlled Legislature to pass the rate cuts, but the ballot question is a “fallback,” State Director Don Haggar said Wednesday.
“I’m confident the Legislature will honor their word,” Haggar said. “If the Legislature isn’t able to come up with a solution ... this session, or if they decide, ‘Oh we’ve changed our minds and we want to spend this money,’ well we won’t hesitate to put this on the ballot.”
The ballot question proposal comes amid ambiguity in a law requiring a 2016 half-cent sales tax hike for teacher pay to be scaled back if the state gained the ability to collect the tax on online purchases. Under the law, the state’s 4.5 percent rate is to be rolled back by one-tenth of a percent for every additional $20 million the state reaps, with a floor of 4 percent.
It was ultimately South Dakota’s case that led to the U.S. Supreme Court’s decision in June to overturn two decades-old high court decisions that made it tougher for states to collect sales taxes for certain purchases online. The state began collections Nov. 1, but officials believe new legislation is required for the envisioned tax reductions to occur.
Haggar called the group’s plan a “simple” solution, saying it would unhitch the rate cut from online sales taxes and simply phase it in over five years. The measure calls for a rate reduction of one-tenth of a percent each July from 2021-25.
Haggar said he’s confident online sales tax collections will exceed the loss in revenues from the proposed tax cut. He said it would help the Legislature honor its word and potentially improve economic growth.
Americans for Prosperity-South Dakota said in a statement that the group is marshaling activists across the state and urging lawmakers to keep their pledge. Placing the proposal on the 2020 ballot would require supporters to gather thousands of signatures.
A spokeswoman for Gov.-elect Kristi Noem said in a statement that Noem is committed to preserving the state’s “low-tax legacy.” The incoming governor is looking forward to releasing her budget proposal in January and “working with the Legislature on these issues,” spokeswoman Kristin Wileman said.
Incoming Senate Minority Leader Troy Heinert, who opposes the plan, said the intent of the sales tax hike was to increase teacher salaries. The Democratic lawmaker said it’s still unclear how much revenue will be generated on purchases from out-of-state retailers.
He said rolling back the tax hike would lead to lower educator pay and losing teachers, which would affect programming and class sizes.
“The reduction ... that they’re talking about hurts nobody but the students in South Dakota,” Heinert said.
Debate on bill allowing guns in state Capitol
SIOUX FALLS (AP) – A measure set for debate in South Dakota’s upcoming legislative session would allow concealed pistols inside the state Capitol.
House Majority Leader Lee Qualm told The Associated Press this week that he plans to propose a bill similar to an unsuccessful 2017 measure that would have allowed people with an enhanced permit to bring concealed handguns into the building if they registered beforehand with security.
It’s unclear how such a plan would fare under Republican Gov.-elect Kristi Noem’s administration.
A spokeswoman for Noem said in a statement that Noem is a strong Second Amendment supporter but won’t commit to legislation until she can review its text. Incoming Lt. Gov. Larry Rhoden voted for the 2017 bill as a state representative.
Qualm said he doesn’t agree with gun-free zones, adding that Capitol security can’t be everywhere, all the time.
“The mood of the country, you know, there’s some crazy things that are happening out there, and for us not to be able to defend ourselves and protect ourselves just doesn’t make any sense,” Qualm said. “We need to be proactive on this.”
The 2017 measure would also have included qualified law enforcement officers and qualified retired officers. Outgoing Gov. Dennis Daugaard vetoed the 2017 bill, saying in his veto message that law enforcement protection in the building provides a secure environment.
Republican Sen. Arthur Rusch, an opponent, said that he thinks allowing concealed pistols in the Capitol would make it a riskier place. Rusch said he’s satisfied with Capitol security, which is provided by the South Dakota Highway Patrol.
There are no metal detectors or other security checks at the Capitol entrances to enforce the current prohibition on most people carrying guns in the building.
At the end of November, there were 107,172 active regular, gold card and enhanced permits in South Dakota, according to the Secretary of State’s office. To date in 2018, 1,474 new enhanced permits have been issued. An enhanced permit has requirements including completing a training course.
The 2019 legislative session begins Jan. 8. Lawmakers are also likely to take up legislation that would allow people to carry concealed handguns without a permit in South Dakota.
