August 2011

DISGUSTED FOR ALL THE WRONG REASONS

l3wis August 10, 2011 10Comments

This was originally posted on sdallianceforprogress.com. I thought it was relevant and decided to post the entire article.

By BERNIE HUNHOFF | Contributor

“Disgusted.” That’s what Governor Daugaard told the Yankton Press & Dakotan newspaper he felt (in its July 21 issue) when South Dakotans collected over 23,000 petition signatures so we can all vote on whether your tax dollars should be used for more corporate tax breaks.

Disgusted? There are lots of things to be disgusted about in politics today, but petitioning for a statewide discussion on economic development would be way down on my list.

I’m disgusted because state funding for schools has dropped so low that it leaves communities like Yankton bickering over whether we should raise our property taxes.

I’m disgusted that we lost tens of millions of dollars in matching money for Medicaid because of poor budget decisions in Pierre. The result? Less health care services for poor children and the elderly.

I’m disgusted that we are raising college and tech school tuition as much as 8%, and that we’re the only state without assistance for students from low-income families.

South Dakota is a great state, but a lot of our public policies disgust me.

Another wrong-headed policy is the notion that we should rebate some of the contractor’s excise tax (which otherwise goes to the general fund for schools and health care) to big corporations who plan projects of $5 million and above, at the discretion of the governor’s office. It would replace a current program that was revealed to be a boondoggle before being terminated by the legislature in 2010 because it cost too much.

The governor’s staff told the P&D that 80% or more of the new rebates will go to wind and ethanol programs. They say that now because wind and ethanol has popular support, but nothing in the state law guarantees that and it’s unlikely to occur. TransCanada Pipeline, a major competitor to wind and ethanol, has been one of the beneficiaries in the past.

This newest tax give-away program might cost even more than the one we killed in 2010, and it comes at a time when the general fund is already strapped from the recession.

The administration says the program will pay for itself through increased sales and property taxes. If that’s the case, let’s end the contractor’s excise altogether and then the state’s coffers will grow even more.

Let’s end the tax for farmers who build a machine shed or barn. Let’s end it for

the family-owned car dealership under construction north of Yankton. Let’s end it for the two women who tore down an old building on Howard’s main street and built a new coffee shop and eatery. Let’s rebate it for the entrepreneurs who restored the old bank building on Vermillion’s Main Street into a fine steakhouse.

Let’s end it for every businessman and farmer. But let’s not let government pick winners and losers. If big projects get a rebate, Main Street should qualify for the same. Everyone should be treated alike when it comes to taxation.

We all know that raising well-educated and healthy children is the best investment a government can make in economic development and the future. We’ve cut those priorities in recent years, and no community knows it better than Yankton, where we’re now seeking charitable contributions for extra-curricular activities.

So if the administration wants to write rebate checks to big companies, it should find an appropriate funding source. Don’t take even more resources away from schools and our poorest families.

EXPLANATION

In South Dakota, a veto referendum on tax revenues is officially cleared for the 2012 ballot. The veto referendum tackles HB 1230, which would dedicate part of tax revenues for grants to some business projects in the state. Specifically, if the law is not repealed, starting on January 1, 2013, a 22 percent portion of contractor-excise tax revenues would allocated to a “large project fund”. The state Board of Economic Development would then decide which specific projects would be qualified to receive grants from that large fund. Reports say that the law requires the projects to be at least $5 million in size. Submitted signatures were verified on July 18, 2011. However, the measure was not officially certified for the ballot at that time.