South Dakotans will likely have two meaty ballot measures to vote on one year from now. Ed/med activists yesterday submitted petitions with over 33,850 signatures to place a 1% sales tax increase on the November 2012 statewide ballot. The proposed tax (described here on the petition) would generate $175-$180 million a year allocated 50-50 to K-12 education and Medicaid.
33,850 signatures is a lot compared to some other ballot measures. Petitioners needed 15,855 to place the initiative on the ballot. Last spring, Democrats collected 22,883 signatures to qualify the other big fiscal ballot measure, on the governor's new corporate welfare fund, for a public vote. A couple years ago, smoking ban opponents gathered 25,400 signatures, while medical marijuana supporters gathered 32,000 signatures. But in 2008, abortion banners submitted nearly 50,000 signatures.
Even if they didn't set a record for signatures, the South Dakota Education Association and the South Dakota Association of Health Care Organizations have staked a remarkable claim to popular support and organizational ability. As Tom Lawrence notes, with noted and successful campaigner Andy Wiese directing this drive, we can expect some serious campaigning.
I am curious how this initiative will interact with candidates' campaigns and party politics. The other major ballot measure, the corporate welfare referendum, naturally strengthens Democrats' hands. We get to holler about crony capitalism and maybe even stoke some Occupy Wall Street synergy by shouting "Support kids, not corporations!" Republicans have to make the more complicated (but by no means impossible) case, explaining how sacrificing tax dollars to wealthy corporations does more long-term good for the state's economy than investing in education, infrastructure, or other public services.
But the sales tax initiative gives the easy line to the Republican campaigns: "No new taxes!" Democrats have to make the harder (but by no means invalid) case that we aren't paying enough to maintain vital public services and that dollars you keep in your pocket won't matter if your kids can't get a decent public education or if your neighbors can't afford health care. Some Democrats may find it easier to join Republicans in opposing this initiative, saying not "No new taxes!" but "No new regressive taxes" and advocating alternatives.
Update 19:58 MDT: Mr. Woodring sees a possible harbinger of doom for our ed/med initiative in Coloradoans' resounding defeat of a tax increase to fund education.
My ballot-box prediction for this measure: yay 40%, nay 60%.
My recommended alternative: Same tax hike, exempt groceries.
I put the nays at 57%.
I agree with Stan's alternative, but I remember conservatives, including some legislators from the Bison-Lemmon metroplex, making the "everyone has to pay something" argument in the 1980s. According to them, the tax on groceries was the only way to eliminate freeloaders.
Good point Stan, but SD law prevents exempting specifics things. There's either a sales tax on it, or not, which prohibits exempting groceries in this case. Bottom line is that none of us wants more taxes, but we have no consistent revenues in SD. We have to look at new revenue sources, so what is fair for everyone? I don't know...wish I did!
"would generate $175-$180 million"
No Cory, it will not generate anything. It will take away $175-$180 million in sales of goods and services, as it takes it out of the hands of the consumers and sends it to Pierre.
What will prevent the legislature from allocating the other 4% of sales tax funds differently than before, nullifying the intent of the petitioners?
There are a lot of people wanting a raise after several years of nothing.
So I wonder if all the nay voters are the disciples of Grover Norquist and supporters of the Cain and Perry tax plans that raise taxes on the middle class and give the top brackets a break!
My prediction is this will get the same level of support as the Sioux Falls event center.
Rocker says,
"Good point Stan, but SD law prevents exempting specifics things."
That's news to me! Then why were certain legislators discussing the elimination of various sales tax exemptions this past summer -- some of which are exceedingly specific?
If I buy a house, I don't pay sales tax on it. Is that a specific exemption?
If I'm a wholesaler and I sell something to a retailer, I don't have to charge that retailer sales tax. Is that a specific exemption?
If the law really is written to outlaw specific exemptions, then maybe we should change the law. Or maybe groceries are in fact a general exemption. "If you can buy it at a supermarket and it has nutritional value, then it's exempt" ...
Incidentally, on another note, but still relevant here: As logical an idea as Charlie Johnson's B.E.E.F. plan might be, I suspect that if it went to a referendum, it would go down by a 20% yay, 80% nay margin. It would meet an equally grim fate in the Legislature. I'm not knocking the plan; I'm just reading the landscape as I see it here.
I'm trying to figure out what we might do that will help solve the problem, and that the people will actually accept.
Maybe the Democratic Party in this state should get an "advisory group" together, a sort of "gaggle of gurus." They could start with those Dems who have had success: Tim Johnson, Stephanie Herseth-Sandlin, Tom Daschle, George McGovern. Plenty of people would support some of the Dems' ideas, tempered the right way (no pun intended).
Right you are, Stan! State law exempts all sorts of things from sales tax (like gold, currency, and some ink and newsprint) and we could certainly exempt more (like groceries) if we wanted. Recall that a summer interim committee considered revoking a bunch of them, then chickened out.
Troy, you propose an interesting predictor! Can we really extrapolate the Sioux Falls electorate to the statewide electorate?
And Jana, I would love to see the Nielsons look for overlap in those views!
Thanks for the comment on BEEF, Stan. It does need to be discussed further though. How many readers of this blog have an understanding of it? It would eliminate property taxes as the source of local contribution to education funding formula--it would also replace the funding now coming out of existing state funds for the state portion. Property taxes would still cover any capital outlay, bonding, and special ed on a local level.
North Dakota is one election away from eliminating property tax in their state.
Local control could be a problem on that ND property tax repeal. Of course, if we strike oil the way the North Dakotans have, maybe we too can repeal our obsolete taxes.
The only just tax is one that someone else pays. Oh the sin of coveting.
The only just tax is one that EVERYONE that is able pays SOMETHING. There is no such thing as a free lunch.
Steve, the 1% ed/med tax appears to apply to everyone. Alas, Michael, I'm not convinced it rise to the level of a just tax even under your over-simplified criterion, since a lot of people who aren't able get hit harder than folks who are able. Your criterion needs to better address proportionality.