Senate Bill 174, Senator Stanford Adelstein's proposal for a temporary extra-penny summer sales tax, finally gets its thrice-deferred committee vote tomorrow. I find myself in the uncomfortable position of advocating, as Mr. Ehrisman describes it, "raising regressive taxes on working people"... and doing it to them while they're on vacation, no less.
As I review last summer's taxable sales data, I find an extra-penny sales tax during summer 2010 would have generated around $44 million. That's a third of our projected state budget shortfall. If the only revenue enhancer we pass is SB 174, we reduce Governor Daugaard's cuts from 10% to 6.5% Instead of firing 18 teachers, Madison Central could by firing just 12.
SB 174 is far from a full fix. It extends our reliance on a regressive tax. I would rather see a permanent reform of our tax system toward a fairer, more progressive tax structure. Remember, I'm Gerry Lange's neighbor, from the socialist Left Bank of Lake Herman. I would rather see a series of bills for comprehensive tax reform:
- Repeal the food tax.
- Repeal the $525 million in sales tax exemptions we hand to various business lobbies.
- Create a property tax homestead exemption for the first $100,000 of residential value.
- Impose a graduated property tax rate to levy more on residential construction value over $1,000,000.
- Convert the ag productivity tax into a straight income tax for farmers and everyone else.
- Sock it to Wal-Mart and TransCanada (a stiff pipeline tax alone could erase our deficit for good!).
Alas, those bills aren't on the table. Stan Adelstein's temporary summer penny sales tax is. If someone can show me that there's a third way on the table that avoids the summer tax and avoids the governor's job-killing budget cuts, I'll replace that penny from my Facebook profile pic and advocate the better solution.
But where is that solution? Is there any bill left before committee that restores state K-12 aid to where it belongs (or at least to where statute promised it would be)? Do any of the progressive proposals I prefer have any momentum, any chance of surfacing in an amendment or the final budget in this session?
Now maybe I'm smoking dope thinking Adelstein's proposal has any momentum, but we have the ASBSD poll, the Dakota Poll, Adelstein's Rasmussen poll, Rep. Patricia Stricherz's blog poll, and roomfuls of South Dakotans showing iron-clad majorities supporting an extra-penny sales tax. Maybe folks are too fixated on that simple-to-express solution. But that's where the talk is, and that's where the votes could be.
If nothing else, maybe someone can show me that the budget bleeding isn't as bad as Governor Daugaard tells us and we really can find some efficiencies that won't drastically reduce services or result in thousands of lost jobs. Maybe we can ride out this session, then get some sensible citizens to initiate a tax reform measure (feel free to borrow from the above list) to restore our shaky tax system to permanent health. But right now, with 13 Legislative days left and no good doctor in town, it looks like I can choose between Stan's duct tape (ouch) or Denny's axe (ouch!!!). Pass the duct tape!
And remember, Chairman Rhoden and members of Senate State Affairs (tomorrow, Tuesday, high noon, room 414, State Capitol): dollar for dollar, a sales tax increase causes fewer job losses and other economic harms than state budget cuts.
If, as you say, a stiff pipeline tax alone could erase our deficit for good, then we don't have to tweak the sales tax or institute an income tax, do we?
I could support a pipeline tax. Any other sort of tax increase, not so much.
Let's see what happens in Wisconsin and Ohio. The outcomes of those "experiments" might well determine the future directions of state governments in regards to taxing and spending policy.