Last updated on 2011.02.02
My neighbor Charlie Johnson has a BEeF: his Better Education expects Funding proposal would create a 1% gross receipts levy dedicated to funding K-12 education. Here's Johnson's explanation, for your consideration and comment:
The Better Education expects Funding(BEeF) program is a revenue source to fully fund the state aid to school formula now in place. The basis of the program would create a gross receipts levy of one percent on all sources of revenue including but not limited to retail sales, rental income, farm commodities, subsidy payments, services, dividends, interest, stock appreciation, and wages. Funds collected would replace monies by the state of South Dakota and local real estate taxes presently used to fund the school formula.
The goal would be to replace the use of real estate taxes for school purposes except for capital outlay and special education. Monies used to replace the state share of funding would free up the state budget to finace other crucial areas. The gross receipts levy(CRL) would be limited to one percent maximum and 100% dedicated to K-12 funding.
A constitutional amendment to implement the program would be proper and necessary to make sure that future legislatures did not increase the levy, exempt certain taxpayers, or use the program for non-education purposes. The program would be unique in that its only and true purpose is to fund education.
Also it would require commitment from every resident in South Dakota. Teenagers with a part time job would pay along with highly paid executives. Rent, interest, and dividends along with farm commodities would pay. It could be viewed as the 'everybody gets to contribute to education" program.
With the lowering or elimination of real estate taxes for school purposes, property owners and tax payers would be in a better position to fund capital outlay projects or better fund local government for road improvements. Freeing up state funding would allow the state to use scarce funds to fund other areas including higher education, Medicaid, and judicial areas. Real estate taxes would still be available for schools if local residents decided to opt out to provide additional funding beyond the school aid formula [Charlie Johnson, "Better Education expects Funding (BEeF) Program: Everybody Gets to Contribute," Facebook note, 2011.02.02].
Charlie and I both welcome your comments on his proposal and better ways to fund education.
Before we even think about imposing any new tax with all its attendant paperwork burdens and administrative complications, let's make sure that everyone pays their fair share of taxes according to the laws we have in place right now. I refer particularly to the use tax.