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HB 1189: Pipeline Tax Rides Again!

Governor Daugaard insists that we can't raise taxes. He frets that taxes now could hinder economic growth, even though his 10% budget cuts could do even more damage to the South Dakota economy.

So Governor Daugaard, tell us what's not to like about the pipeline tax proposed in House Bill 1189? This tax only applies to big crude oil pipelines shipping 10,000 barrels or more a day. The money would come primarily from big out-of-state companies like TransCanada. The tax won't stop TransCanada from building Keystone XL across our fair state (and alas, signals from the Department of Energy suggest President Obama won't, either, despite all sorts of encouragement). Charging two cents per barrel on oil that costs $90 to $100 a barrel won't sink any jobs, especially when the Keystone XL pipeline will help TransCanada make more than six bucks more per barrel. HB 1189 even caps the tax at $30 million and dedicates it to an environmental clean-up fund to take care of spills in case TransCanada tries to dodge liability the way competitor Enbridge is doing in Kalamazoo.

HB 1189 has bipartisan support: its prime House Sponsor is Republican Don Kopp, while prime Senate sponsor is Democrat Jason Frerichs. If this bill can bring those two together, it should be able to bring Denny to the table. HB 1189 funds our response to a new environmental and fiscal threat to the state without harming the local economy. Tax that pipeline!

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