Here we go again, the bleeding heart liberals want education funding while the Repugs don’t want to pay for it. Their compromise? A sales tax increase;

A group of advocates for health care providers and public schools is moving forward with plans to initiate a ballot measure that would permanently raise the state sales tax by 1 cent.

Motivated by deep cuts in state spending during the past legislative session, the coalition polled likely voters on their appetite for a sales tax increase to pay for state services.

This is misguided for a number of reasons, and I will give you the basics;

• The money exists to fund education already. Over $800 million sits in an investment fund specifically for rainy day situations, but the Repugs in the state would rather give massive tax cuts to corporations instead of spending that money on education. It is idiotic to raise taxes when we simply just need the legislature to authorize spending these funds.

• Sales taxes are regressive, they affect the working class and poor more then the rich. It is NEVER a good idea to raise sales taxes, especially to fund education (which is traditionally funded by property taxes).

• Let’s say the investment fund did not exist. Fine. Why not start a petition drive to have a state income tax on households making over $100,000 a year? Or taxing advertising, or even better yet, a corporate income tax? People say any of these things are job killers. Bullshit. Corporations set up shop in SD because they can get away with paying shit wages. It has nothing to do with taxes.

• Healthcare costs are over the top. There needs to be healthcare reform instead of continuing to feed this monster with more tax increases.

Instead of tax increases, a more prudent thing to do is to encourage legislators and the governor to tap into the investment fund. I would also suggest we do some house cleaning in Pierre.




#1 Oliver Klosov on 07.21.11 at 3:09 pm

Why are you afraid to let the people of South Dakota vote on an issue? Because you disagree with it? If I run into someone gathering signatures for this petition I will treat it as I do EVERY OTHER PETITION. I will sign it. Agree or disagree with the premise of the petition, let both sides put forth their argument and then let the people decide. I have great admiration for the individuals willing to stand in parking lots asking for signatures on a petition. “In all my years I ain’t never heard, seen nor smelled an issue that was so dangerous it couldn’t be talked about.”

#2 katie on 07.21.11 at 6:09 pm

I am amazed that the libs are pushing this. They are the ones always crying that sales taxes are regressive and hurt the poor. Me? I favor a tax that everyone pays instead of one that hits only property owners. This IMO is why local opt outs fail – they hit people unequally; usually those pushing for them would pay little in extra taxes but think it’s just fine for those who pay the lion’s share of taxes for education etc to pay even more.

No, I won’t sign this petition either. And I will ask anyone wanting my signature on this thing just why they think it’s OK this time to support such a tax increase that will hit the actually force everyone to pay equally.

But the cynic in me thinks that there will be a rebate in such a bill if passed that will give the money back to the “poor”.

#3 Shelly on 07.21.11 at 8:28 pm

My mother voted against the recent opt-out in Huron. It’s not because she doesn’t support education, but because Pierre should be held to its constitutional obligation to properly fund public education. We have millions in reserves, but beloved governor refused to tap into them. He wants to hand that money out to corporations who are already going through ND and NE to build a pipeline. How fiscally wise of him. By the way, my mother’s daughter (me) lost a teaching job of ten years due to beloved governor’s stubborn and short-sighted ways. I’m still trying to find a job and have all but given up on the teaching profession. There are too many other teachers in same boat I’m in. I would vote for that penny increase, but it lets the Pierre off the hook, and that’s just wrong

#4 rufusx on 07.21.11 at 8:41 pm

Raise the rate, BUT tax advertising and exempt food and utility bills.

#5 Joan on 07.21.11 at 9:12 pm

Amen! Also exempt clothes.

#6 matt70 on 07.21.11 at 9:15 pm

Amen! Exempt Beer also!

#7 l3wis on 07.21.11 at 9:22 pm

Oliver – Normally I would agree, I will sign any petition. But raising taxes just to raise taxes is silly, because there is NO guarantee they will spend the money on education.

Shelly is right. We don’t need to raise taxes, the money exists. $800 million to be exact. Enough of the fucking games.

#8 Greg on 07.22.11 at 9:13 am

Methinks that Mr. Scott has turned into a person who cannot turn away from FOX news…we have enough money (albeit 1x) to cover all the costs for the years ahead for education. The medical costs are those for Medicaid which covers kids, the poor, and elderly in nursing homes. Ask a person doing front-line care in a nursing home how much they get paid. Probably not much more than one gets slinging burgers at the local burger doodle–except that there’s not a burger doodle in Wakonda.

What IS needed is state government to look ahead and determine what revenue is needed for the state to continue with current services (maybe with a little COLA for our well-paid state workers and those working based on state/federal funds–those nursing home folks for instance). Then we need to look at the revenue sources. I wonder how far the $800 M would go, particularly with the increase in eligibles for Medicaid come 2014.

#9 l3wis on 07.22.11 at 9:39 am

Greg – That is just it. We could fund Ed and Healthcare with the interest from the fund without even touching the principal. This tax increase is not needed.

#10 Oliver Klosov on 07.22.11 at 12:46 pm

l3wis — Two questions for you; how much additional money do you think the state should be providing for education and healthcare and how much are you thinking the $800MM is earning in interest?

#11 l3wis on 07.22.11 at 10:31 pm

It earns between $10-$15 million a month, depending on the markets. Sounds like a pretty good chunk of change. This whole tax increase bullshit is just what the Repugs like to see. And they will take the money and not spend it on education. We could double property taxes and sales taxes, and the Repugs would still find a way to cut education funding. Don’t you get it?

#12 Oliver Klosov on 07.23.11 at 12:38 pm

There’s absolutely no way that $800MM earns $10-$15MM a month. That would be an annualized rate of return of 15% to 22.5%. If the state is making 2% annualized on those type of funds I’d eat hay with a horse. Interest rates on investments appropriate for this type of asset are practically ZERO and have been for over 5 years. 2% annual rate of return would provide $1.3MM per month or about $16MM per year.

Can you provide a good argument for why the state needs to spend more? If you look at the numbers I think the state is doing a pretty good job compared to most other states. Depending on which study you choose South Dakota ranks somewhere in the 40’s for the amount of money we spend but somewhere around 10-20th for quality of education.

#13 l3wis on 07.23.11 at 10:42 pm

Like I said, depends on the returns for each month. Some months are negative, some are positive, some are very positive. The point I am making is that the money is there, why do we act like it isn’t. Screw a tax increase. We created the investment funds for a reason, freaking use them.

#14 Food tax to rise again? (Guest Post) — South DaCola on 07.30.11 at 10:53 pm

[…] and Medicaid. Funds are needed because of cuts from the last legislative session and governor.* *(As I pointed out the cuts really are not needed because the money exists in the investment funds to cover the shortfall, over […]