Sales Tax vs. Budget cuts
Air Date:02/16/2011
The State Legislature is considering a bill that increases the sales tax during the tourist season to stem the state's budget crisis. Governor Dennis Daugaard has promised to veto any new tax increases, and a number of lawmakers have pledged to oppose it. But the measure is gaining some public support by those who oppose large cuts to education and healthcare. SDPB's Charles Michael Ray spoke with lawmakers, pollsters, lobbyists and voters for today's Dakota Digest.
If you're a politician the conventional wisdom is that supporting a tax increase is political suicide. Take these legislators who voice general opposition to a one cent tourist season sales tax at a recent cracker-barrel in Sioux Falls.
"I would not support a tax increase at this time," says Republican Representative Steve Hickey.
"At first blush, I would say that I'm not supportive of a tax increase," says Republican Representative Mark Willesden.
"I would not rule that you but I would be very reserved about considering raising taxes," says Republican Representative Manny Steel.
"If we want to grow the economy in this state, if we want more businesses to come in and we stay tax friendly we can get more businesses in and that may be a lot better way to build our revenues by having more business here," says Republican Representative Hal Wick.
Republican Rapid City Senator Stan Adelstein is floating the temporary sales tax proposal. The bill is touted as a tourist tax. It aims to reduce the cuts to education and elderly health care. Adelstein says without raising taxes, schools will be forced to cut back or close and nursing homes in some towns will shut down.
"Where will these elderly people go? How can we possibly cut salaries for those who take care of people who cannot take care of themselves? It's a very serious problem and the solution is so easy," says Adelstein.
The solution might be easy on the surface. But raising taxes is an idea voters generally oppose. However, Adelstein points to an independent Rasmussen poll he paid for showing 74-percent of South Dakotans favor a temporary increase in the tourism season sales tax over cuts to education and Medicare. Adelstein believes voters can stomach a small tax increase easier than cuts to services they see as essential. A quick poll of people on the street comes up with a mixed bag.
"Cuts can never be good for education. It's foolish to think that's going to further improve education in any shape or form, one sent sales tax if it's necessary that's fine," says Richard Graff
"I think our taxes are high enough and I think we can be creative in other things instead of raising taxes," says Darlene Mohr.
"I hate to see that we cut any more in education it's been cut enough, you know," says Sheri Erickson
"The taxes with gasoline, cigarettes, alcohol and everything everything's taxed anyway why should we have to pay additional taxes there's got to be a better way," says Bruce Leman
Interviewing people on the street gives voice to public opinion. But it is not a scientific way to conduct a poll. The newly formed "Dakota Poll" is an attempt to get a much more accurate understanding of the will of the people. Earlier this month the Dakota Pool asked 400 Tea Party voters in the state their opinion. The poll results mirrored the results of the Rasmussen poll conducted earlier by Adelstein. Sam Hurst is one of the coordinators of the Dakota Poll.
"Our results showed a group of people who are far more pragmatic and far less anti-government than I would have thought before the poll was conducted," says Sam Hurst a coordinator of the Dakota Poll.
Hurst says the Dakota Poll showed in this case Tea Party supporters actually favor increasing taxes.
"73 percent of the people who responded to our poll said they would favor a proposal to increase the state sales tax by one percent during the tourist season rather than making cuts to public education and nursing home and health care," says Hurst.
The idea that the Tea Party in South Dakota supports a temporary sales tax over government cuts is absurd to Barb Lindberg President of the South Dakota Citizens for Liberty a Tea Party Group. She questions the poll results.
"Our members were outraged that something like this would be aired because we are a 100 percent behind our governor Dennis Daugaard on his 10 percent tax cut and on his freeze on taxes," says Lindberg.
Dakota Poll coordinator Sam Hurst stands by his results. He says the poll is fully transparent, independent and scientifically based. He says anyone can view the methodology on line. He adds that the results here mirror two other independent polls on this issue. Regardless on where the polls stand - Barb Lindberg says she's confident Lawmakers in Pierre are lining up behind the plan to cut the budget by 10%. She says this year Tea Party ideals are getting real traction in Pierre.
"I am overwhelmed with appreciation of our legislators. This is a very rare group of legislators this year, not that we haven't had good legislators in the past but I honestly believe they are trying to do the right thing. So we're going to support them this is one time we can get behind our government, behind our state government and you know let's go for it," says Lindberg.
Governor Daugaard is going for it. He's promised to veto any tax increases. It would take a 2/3 majority to override that veto. For this to happen Senator Stan Adelstein says it will take a large movement of voters, lobbing their legislators to raise taxes rather than make cuts. Even if the polls are correct and voters favor Adelstein's plan, in this tight budget year that may be easier said than done.
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