Patrick Anderson features my moonshot plan to raise teacher pay $10,000, to 34th in the nation, on the education e-pages of that Sioux Falls paper. My plan secures that monumental raise, around $92 million a year spread among about 9,200 K-12 teachers, by lifting 16% of the $582 million in sales tax exemptions the state grants to favored goods and services.
Actually, let's update that: The Governor's proposed budget for FY2016 includes $735 million in sales and use tax exemptions and other tax expenditures. For our moonshot teacher teacher pay raises—which simply make our wages competitive, not over the moon—we need 12.5% of those exemptions, one out of eight dollars.
Anderson notes that a third of the sales tax exemptions are for ag products (e.g., cattle feed and bedding, tractor fuel, swine and bull semen) and asks if nixing those favors would unfairly burden farmers. (Ah, clever, corporate journalists, trying to split the Democrat farm-teacher alliance!) I don't have any particular 12.5% on the chopping block yet. I've certainly never suggested we should take all of the exemptions from the farm sector. To the extent that it is possible to levy a regressive tax fairly, we should spread the exemption cuts around to share the burden among those best able to bear them, to tap wealth where wealth lies. I suggested in our phone interview we might do better to cut the exemption for shoppers' guide ink and advertising... but somehow that suggestion didn't get past the editor's desk at that Sioux Falls paper.
I also told Anderson in our phone conversation that I recognize that ending our our national embarrassment as the state that values teachers least by raising a regressive tax is a suboptimal solution and that many teachers would likely vote against raising their pay by expanding a regressive tax. I'd be open to a wide array of superior funding mechanisms for competitive teacher pay—corporate income tax, re-appropriation of corporate welfare, pot of gold at end of rainbow. I'm just offering a plan within the realm of the politically possible.
It thus seems perfectly possible to sir down with smart people in government and industry and prioritize those exemptions. Which exemptions serve the greatest public purpose? Which cuts will fall on sectors best able to bear them? Make list, cut off the bottom eighth (eighth, I said, eighth!), and we have competitive teacher wages.
And with seven-eighths of the exemptions, $643 million dollars, still on the table, we'd have plenty of room left to consider lifting exemptions to reduce or eliminate the tax on food, the way Minnesota and other civilized states do... because after all, how fair is a tax system that taxes your bologna sandwich but not bull semen?