UPDATE: More Games

After such a nice victory in Taxation Committee this morning, a move led by Rep.Faehn in the House this afternoon has now sent HB1255 to Appropriations Committee on Monday morning for its next vote, rather than the full House. So here we go. Your contacts were  wonderful to the last committee. Let’s convince this one too! The people need this tax shift.

If you need any further inspiration, read this from Matt Gassen, Director of Community Food Banks of SD (which distributes food to over 500 agencies in SD)
“No other tax so directly takes food off the family table as the current 4% state tax on food items. To shift the tax off food as proposed in HB 1255 could be one of the single most significant pieces of legislation to impact the hungry of South Dakota in a long time. With the continuing increase in the numbers of individuals (78,000 statewide) seeking emergency food assistance a recent study shows that 32% choose between buying groceries and paying for utilities or heating fuel, 29% choose between food and rent/mortgages and 32% choose between food and gas for their cars. The passage of this bill would make the family budget go farther and increase the amount of food that their grocery dollars would buy. It could also help to ease the strain on emergency feeding programs who are struggling to find enough food to help all those in need.”

Next to house floor – needs 2/3 vote

HB1255 is a revenue-neutral tax shift. The state comes out even with the shift from the 4% state portion of food tax to  3/10% on non-food sales. It is revenue-neutral for the state, but middle- and lower-income people will be better able to afford their basic needs. Better than refund programs. The benefit comes right at the grocery store, to reduce hunger, and improve health and family financial stability.

What about the argument that taxing food provides the state a “stable source of revenue”? This is a line of reasoning from a time when the economy was better, and the worry was  that when times get tough, at least there would be revenue coming from grocery purchases. Well, times are tough. This is the down time. Making a revenue-neutral tax shift when the economy is down would take the worry out of taking tax off food. This is the time to make the shift. The issue will continue until the tax comes off food, so legislators would be wise to do it now. (Does this make sense? There should be a more concise way to explain it.)

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For those who think Sioux Falls is sheltered from the recession, check out these numbers (Bread for the World)

• SD food stamp enrollment saw an incredible one-year increase from Sept.’08 to Sept.’09: 34% !!

Food stamps traditionally go up and down with the economy. But no one envisioned such a huge one-year increase.

(The Food Stamp program is now called SNAP.)
Find the data for your county here:

http://dss.sd.gov/foodstamps/data/foodstampdatapast/index.asp

Minnehaha County residents will be completely shocked by their 48% increase.

Let your local Social Services workers know you appreciate them. They are working hard.

One more note: Even if you include up to 4,000 households using commodities rather than food stamps (option available on reservations), there are still thousands of eligible low-income households NOT signed up for food stamps, easily 15,000 to 20,000 or more. The state should campaign for them to sign up. (It’s all federal funds.)


• Food tax refunds’ dismal reach:
less than 1% of SD’s low-income population.

Only 630 households in the whole state are receiving the quarterly food tax refunds. Make sure your local media report this.

Why is it important?

• People pay a lot of money for the tax. Every year the money families pay in food tax would cover meals for 3 weeks.

• There is a movement afoot to raise sales tax for new city projects, even tho’ cities have other ways to raise funds. In an attempt to make this palatable, the draft of the state legislation says cities may refund the new tax to their low-income residents. So far, there is no effective way to do refunds. Such refund programs are inherently ineffective. People need to know, so they don’t think this option would solve the problem of a higher sales tax, and the resulting higher the cost of living.

Next Monday, Nov.16, the Sioux Falls city council will receive the report from the Event Center Task Force. Whether or not you want a new event center, we hope you will agree that the plan should not ask for the funding to come from struggling families, elderly, disabled people, nursing homes, etc, which it will, if sales tax is the choice for the funding.

1. Can you come to city council next Monday? 7pm, 10th & Dakota

2. Will you contact the council before that meeting?

The city council could ask the task force to reconsider their funding option and bring back to the council a plan that does not tax basic necessities.

BACKGROUND
• There is a movement afoot to ask the state legislature to allow cities to raise their sales taxes for new city projects (such as this event center in Sioux Falls).
• Bread for the World takes no position on whether to build new city projects, only on the method of their funding.
• We oppose an increase in sales tax that would have the net effect of raising the cost of living for low- and middle-income people.
• Sales tax in South Dakota applies to many basic necessities, including food, heat and electric bills, baby formula, baby diapers, car repairs, nursing home food and supplies, and thus, higher sales tax would raise the cost of living.
• Cities have other funding options. The tax on hotels and restaurants comes immediately to mind (called bed-board-and-booze tax). These other options would take longer, but most big buildings are not paid for in 3 to 4 years.
• South Dakota is a low-wage state (at the bottom with Mississippi). Many South Dakota households with low-incomes and middle-incomes do not have extra money to spare for higher taxes, meaning the higher tax would cut into their basic necessities.
• South Dakota’s tax structure is terribly regressive already (the state and local tax burden falling harder on the lower incomes than those more well off), and higher sales tax would make this tax structure even more regressive. [For a graph on this, go to www.endthefoodtax.org. In the section “PDF resources”, the graph is item #9.]
•  Special projects should not be funded on the backs of hungry children, struggling families, the elderly, the disabled, and nursing homes.

Below is the contact info.  Let’s take the privilege to speak up for people who need our voices.

“If you think you’re too small to be effective, then you’ve never been to bed with a mosquito.” -Anita Roddick

– – – – – – – –
SIOUX FALLS CITY COUNCIL 11’09
You can leave one message for all the council at 367-8080
You can send one letter and ask that it be copied for all the council. Address: 235 W 10 St, Sioux Falls 57104
OR WRITE EACH SEPARATELY:
Kenny Anderson, PO Box 7402, 57117, 367-8809, 261-5132-h
De Knudson, 2100 E Slaten Ct, 57103, 367-8111, 338-9431-h
Vernon Brown, 1220 S Phillips Ave, 57105, 367-8809, 339-0084-h
Pat Costello, 108 W St Andrews Dr, 57108, 367-8114, 334-6942-h
Gerald Beninga, 4205 S Lewis, 57103, 367-8109, 339-1921-h
Greg Jamison, 6300 Grand Prairie Dr, 57108, 367-8819, 361-9500-h
Bob Litz, 615 S Grange, 57104, 367-8115, 331-4409-h
Kermit Staggers, 616 Wiswall Pl, 57105, 367-8112, 332-0357-h
Mayor Munson, 224 W 9th St, 57104, 367-7200, 336-6987-h

FIND THEIR EMAIL ADDRESSES IN THIS LIST:
kandersonjr@siouxfalls.org, dknudson@siouxfalls.org, vbrown@siouxfalls.org, pcostello@siouxfalls.org, gbeninga@siouxfalls.org,gjamison@siouxfalls.org, blitz@siouxfalls.org, kstaggers@siouxfalls.org,
Mayor Munson <citylink@siouxfalls.org>
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no-food

FROM BREAD FOR THE WORLD;

South Dakota’s food tax refund program reaches fewer than one percent of the state’s low-income households. During the most recent quarter, refunds went to only 630 households statewide. But South Dakota has at least 94,000 low-income households, 32% of the state’s households (the number at the time of the 2000 census).

Rebate-type programs are inherently ineffective in reaching low-income people. This has been known for years from the extremely low numbers reached by South Dakota’s tax refund program for low-income senior citizens and citizens with disabilities. No matter how simple the paperwork, low-income people are missed for many reasons. Low-income, and now some middle-income families, have many stresses and time-consuming issues. They lack financial advisors to keep them signed up for available benefits. Some do not want to go to the store with a debit card from the state. Also, many are elderly, ill, mentally incapable, emotionally distraught, or simply dealing with the crises that come more often to lower-income homes.

“We feel the state made a mistake five years ago in assuming the problems of taxing food could be solved with a rebate-type program,” says Cathy Brechtelsbauer, state coordinator for Bread for the World. “It should be clear by now that cutting the tax on food is the only practical and effective way to reach all the struggling families, elderly and disabled South Dakotans who are negatively impacted by the food tax.”

Even one percent off the food tax would give more benefit to low-income people, as a group, than the rebate program.

Optional addition to the article:

This year legislators sharply narrowed eligibility for the food tax rebates. They excluded households with any amount of food stamps, even partial allotments, leaving only about 12,000 of over 94,000 low-income households eligible.

“Denying refunds for people with food stamps, especially those with only partial allotments of food stamps, ignores the reality that food stamps commonly run out before the end of the month. Then food must be purchased with hard-to-come-by cash normally needed for other necessities like transportation or laundry,” says Brechtelsbauer.

Store clerk Debbie Koppman misses the rebate that formerly came on her debit card every quarter, “It came in real handy. In that month, it was real nice to get it just when food stamps were running low. You could buy milk or cereal or some hamburger that you needed.”