VOTE NO ON M15 • Sales Tax Should Not be Raised.

Bread for the World contributed;

It would raise the cost of food, utilities, and other necessities, hitting middle- and low-income households unfairly.

unfairly.

• Taxing food and utilities is the wrong way to fund state government. While funds for education and Medicaid are important, we should not ask those who are already struggling to pay more for them.

• UNFAIR IMPACT. Those already struggling would pay most dearly for the state’s basic obligations. Already one of the “Terrible Ten” states for REGRESSIVE TAXES, more sales tax just digs South Dakota’s tax structure deeper into the regressive ditch. It’s a knuckle sandwich to low income people, and even middle-income, making it harder to keep up with basic expenses, food and utilities being prime examples.

• IT’S NOT JUST A PENNY. For the consumer, hiking total sales tax from 6% to 7% is a 16.7% tax increase. To the state, the hike from 4% to 5% is a 25% increase. Already, sales tax exceeds a dollar once your purchases add up to $16.67. If this tax increase passes, sales tax will go over $1.00 on only $14.29. People will feel this.

• AFFORDABLE? Some people simply do not have the money for this tax increase. Outside estimates are that the poorest 20% of South Dakota households would pay an average $113 more a year. It’s $334 for the middle 20%, many of whom are struggling also, especially in this recession.

• HEALTH HAZARD. Higher tax on food and other essentials, on top of higher food and utility prices, means people with budgets already maxed out will buy less food or buy less healthy food. This has health effects and is counter-productive to efforts to shore up funds for Medicaid. Hunger among children has both health and education consequences.

• Might the initiative be harsher than needed? STATE REVENUE is up and rising. Since the initiative was drafted, more revenue is available than before. Sales tax revenue is up, including more tax from the higher prices for groceries and electric bills. The past year’s revenue came in more than expected, about $50 million extra! It was not budgeted. It is available. (Should we mention the state has millions that the majority of legislators refuse to spend?) Thus, even without this tax increase, more funds are available than previously thought. A family’s total annual tax on their groceries could buy all their food for 3 weeks Adding 1% would raise this to 3-and-a-half weeks.

• One in seven SENIORS is at risk of hunger. Where would people on fixed incomes get money for the tax? For example, the tax on a $75 electric bill would go from $4.50 to $5.25.

• Is it right to ask very LOW-WAGE WORKERS to pay higher tax? Bear in mind that South Dakota’s median hourly wage, about $14.50 per hour, is one of the very lowest in the nation. “Median” means half are paid less! Children from the bottom 40% of the socioeconomic spectrum have the most difficulty succeeding in school.

• BABY FOOD! On basic baby formula, sales tax (state+city) would go over $1.00 a can. For an allergic baby, sales tax already adds over $2 per can.

• How much would NURSING HOMES benefit? Unlike hospitals, they pay tax on all food and supplies, a significant expense in already-stretched budgets.

• CHARITIES AND CHURCHES. Energy assistance is being cut by Congress. Food Stamps could also be cut. Charities, already swamped trying to help with rising utility bills and food, warn “More tax just adds to the problem. We estimate that charities and churches would need to raise an additional $6.8 million to cover the increase in the requests for help with food and utility bills, if this tax goes up.”

• IS IT FAIR that the tax increase would apply to so many necessities and not to yachts, RV’s, personal aircraft, jet skis, and hot air balloons? These items have tax breaks already. IS IT FAIR to leave zero tax on gold and even on some of the purchases of aircraft and hot air balloons? No tax increase is proposed on these.

• WILL IT STAY PUT? Despite the initiative’s wording, future legislatures are allowed to redirect the funds.

• DOES IT END? There is no end date.

This is a permanent increase in the cost of living, whether people can afford it or not, in one of the nation’s lowest wage states. Low income is detrimental to both education and health. Please consider voting NO on Measure 15. Help prevent an unfair tax increase.

23 comments ↓

#1 Helga on 10.04.12 at 12:23 am

I think you make excellent points and I think you are right.
And thanks to your notice about Jennifer being back I read her blog and learned more things. South Dakota gets $5.8 million from the gov’t. to create a health care exchange for the people of SD. But the governor is not going to do that however, he is going to keep the money, but for what who knows. So he has $5.8 million in his pocket and he wants to collect millions more by raising the sales tax. And he has his rainy day fund. Where do all these millions of dollars go?

#2 Alice15 on 10.04.12 at 9:13 am

Speaking with a pass legislator, he stated this is what the Appropriations Committee is for. They need to go and fight and lobby for dollars just like everyone else.

#3 Craig on 10.04.12 at 9:58 am

Helga if SD doesn’t set up an health care exchange, I sincerely doubt we would keep that money. Daugaard is hoping Romney wins the election because the GOP would work to repeal Obamacare… thus making the health care exchanges unnecessary. You will find many Republican Governors are doing the same thing.

As to the sales tax increase, are you sure Daugaard even wants it? I don’t think he does but I could be wrong.

We have reserve funds for both education and healthcare so why do we feel the need to raise taxes even more? One reason we are able to recruit companies to a part of the country known for horrid weather is due to our low tax structure. Raising taxes even by 1% makes the recruiting process that much harder.

This is a silly, silly idea that wasn’t properly vetted by those pushing for it. If they honestly feel that the state is going to stand by and just allow schools to collect millions more each year with no adjustment to existing formulas they are fooling themselves. They might get away with it for a few years, but rest assured eventually the legislature will start playing with the math and we will be right back to where we are.

#4 Detroit Lewis on 10.04.12 at 3:38 pm

. . . while paying more taxes

#5 rufusx on 10.04.12 at 3:55 pm

Helga – to be entirely fair – IM 15 was neither the governor’s nor the legislature’s idea.

#6 Cathy Brechtelsbauer on 10.04.12 at 6:46 pm

Thanks for doing this blog post. Actually my contribution was from another group I work with, Children’s Agenda for South Dakota. If anyone would like to have a one-page flier with all these reasons to vote No, so you can give it to friends, pastors, and other voters, you can print one from this link:
http://dl.dropbox.com/u/88418838/sales%20tax%20hike%20Ch%20Agenda%20flier%209'12.pdf

#7 scott on 10.04.12 at 7:16 pm

Why aren’t the tea baggers rallying against this?

#8 Helga on 10.04.12 at 10:52 pm

Whose idea was it then?

#9 rufusx on 10.04.12 at 11:00 pm

Helga – the petitions were cretaed and circulated by two groups – 1. the SDEA, 2. South Dakota Assoc. of Health Care Organizations.

I.E., Educators, hospitals, nursing homes, physicians, dentists, etc.

#10 Poly43 on 10.05.12 at 6:58 am

The vast majority of potential voters have no clue what M15 is, let alone what the long range implications are. To the typical voter M15 is who James Bond and other spy the thriller heroes answer too.

http://en.wikipedia.org/wiki/MI5

Thanks for the post. Very short and to the point. Too bad most will never have a clue in the booth what any of this means.

#11 Cathy Brechtelsbauer on 10.05.12 at 9:10 am

Actually, the larger organization of nursing homes, those independent of the big hospitals, is not involved in this initiative, last i checked. I think they are not sure how much, or if, nursing homes will benefit for 2 reasons. 1. The initiative does not specify how the M’caid funds will be divided up among providers. 2. Unlike hospitals, nursing homes pay sales tax on all their food and supplies – already big items in their budgets.

#12 Detroit Lewis on 10.05.12 at 10:10 am

The TV commercials don’t even mention that the healthcare providers will be taking half.

#13 Pathloss on 10.05.12 at 10:16 am

Time for organized bus trips to Worthington from Sioux Falls. No tax on food or clothing in Minnesota. When 7% means less tax revenue, they’ll realize we’re all dumping tea into amber waves of grain.

#14 Pathloss on 10.05.12 at 10:20 am

Raise to 7% and the next major shopping mall will be Exit 1 in Minnesota.

#15 scott on 10.05.12 at 11:11 am

If the commercials mentioned that half would be going to the likes of Sanford and Avera, it would get voted down for sure.

#16 rufusx on 10.05.12 at 11:50 am

The “half” goinmg to Sanford/Avera isn’t entirely accurate either. It’s 80% of half (or 40%) and it goes to ANY health care provider that treats medicaid patients.

It is intended to make up for the fact that persons (yes – individuals, like dentists, doctors, physical therapists and so on as well as hospitals and clinics – but PRIMARILY small rural nursing homes) will be paid for their servoices at something north of the 50% rate of payment they currently collect.

The single biggest impact of the increase in medicaid payments will be to enable RURAL nursing homes and clinics to stay in business. It will allow poor families with sick kids and older persons living in RURAL SD to be served – so that they won’t have to sell their homes and move to SF otr Rapid to get health care.

70% of SD’s medicaid recipients are children. 80% of SD’s medicaids dollars go to providing nursing home care.

Finally, increasing the rate of reimbursement for medicaid providers will REDUCE the amount of those costs that are currently being SHIFTED onto other patients via higher private insurance rates and yes – Medicaire rates.

#17 l3wis on 10.06.12 at 11:30 am

Ruf – stop drinking the Kool-aid. Increasing a regressive tax on food is never a good idea.

#18 Testor15 on 10.06.12 at 5:59 pm

So by regressively taking away another penny per dollar spent by a person who currently can barely survive to give them some kind of schooling or healthcare is a good idea, what is a bad idea? We as a society keep taking more away from the least among us to enrich the wealthy. What a sick society.

#19 Ol' Timer on 10.08.12 at 12:38 pm

What I find amusing about this is the educational system. In Watertown last year they were urging you sign the petition, the only place to sign them was with a principal at one of the grade schools, during school hours.

That same grade school was doing “spirit wear” through a Minnesota company. They actually had an order blank on their webpage to place the orders from a company in Detroit Lakes, MN.

There has to be at least 7 places in Watertown who does screen printing. Part of the reason was the cost of the items, which of course since it was a Minnesota Company, they did not need to pay sales tax.

But yet they want me to pay more for my groceries, utilities, etc. I have two kids who teach, one in public, one in private. I would love to have them both make more money, but the separation between public and private is astronomical. And it is in the favor of public, especially when you figure in state retirement.

As a business person I would love to have you, me, and the whole world make more money. What this group and the state need to do is push to have sales tax collected on everything sold on the internet. That would be a great windfall and level the playing field for local merchants.

#20 rufusx on 10.09.12 at 2:42 pm

Taxing food is a different issue to no taxing at all. I would like to see the sales tax on food removed – but I mean on FOOD. I personally don’t consider things like sodas and candy to BE food.

#21 rufusx on 10.09.12 at 2:43 pm

BTW – sufficient items are currently exempted from sales tax in SD to DOUBLE the state budget – and I don’t mean just double sales tax collections – I mean ALL SOURCES of funding.

#22 Detroit Lewis on 10.09.12 at 3:24 pm

I have often believed that the state sales tax combined with the city sales tax should be even with every item. If I am paying a $06. cent tax on food I should be paying it on cars, RV’s etc. You would think we would be taxing luxury items in SD at the same rate as food.

#23 Detroit Lewis on 10.09.12 at 3:25 pm

And Old Timer is right. Public school pays way better then private when it comes to teacher salaries.

Leave a Comment