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Jan 27

The real budget question before South Dakota

Category: $$$

By Denise Ross

You’ve got to hand it to Gov. Mike Rounds. He knows how to play everybody, not just like a fiddle but like an entire symphony orchestra.

The governor says, “OMG, the money is sooooo bad that I will be forced to cut funding that helps disabled babies.” (You think I exaggerate for effect; not so.)

The chorus cries, “No! That would be wrong!”

The governor says, “OMG, it’s soo much worse than I thought, and I will have to cut funding for special education, deaf schoolchildren, the state fair, the arts, and on and on. Oh, and raise property taxes.”

The chorus cries, “No! We couldn’t stand it if that happened.”

All the while, a temporary sales tax hike - on the Second Floor table since before the official budget address in early December - waits in the wings to save the day. He’s already got us more than half-way to begging him to raise our taxes.

Politically smart and expedient? Absolutely. Intellectually honest? Ha. Leadership? Not by a country mile.

Consider the budget mantra of governor’s of recent memory:

The state’s core mission is to take care of those unable to care for themselves.

Apparently poor sick children, nursing home patients, those too poor to pay tax on groceries, 4-H clubs, the aforementioned disabled babies, special ed and deaf students are perfectly able to fend for themselves. At the same time, the tourism industry and those businesses that would tap the REDI and Future funds, they require the state’s assistance. They are unable to help themselves.

But, as with the financial crisis gripping the nation, we all share in the blame. The structural deficit spending has been going on for years, and it just so happens that South Dakota hit the bottom of the cash stashed in its cookie jar at the same time the recession hit. So it’s easy to point to that as the culprit. No doubt it has made the pinch more pinchy.

Meanwhile, every penny of sales tax levied in South Dakota brings in $177 million per year. Hey, that’s even more than we need to cover the budget shortfall this year AND next. So much better than cutting money off to disabled babies. We could even put some green back into that cookie jar.

So far, all we’re getting are vague references to a search for “additional revenue sources.” After a few more weeks, they’ll put a finer point on it and offer up the salve, the relief of just a teeny half-penny or penny for a few months. Our collective burden will be lifted. And, as a bonus, they’ll levy this during the summertime, so that tourists will pay the tax. We will all be thankful in the face of a tax increase. Brils.

As an added bonus - and this part just KILLS me - the income-tax advocates swallowed the bait, too, barely pausing to take in its aroma. They went from 0 to 60 in 1.3 seconds in reaching into their drawer of Ideas Sure to Kill Any SD Political Career. They dusted off the talking points and haven’t stopped to read the road signs along their lonely highway. All they will get is out of gas, in a sudden way that will leave them startled.

Whether South Dakota ought to have an income tax is a great academic discussion. It also will be great fodder for the 2010 governor’s race. Evil-genius-level of brils.

So, we’re in for higher sales taxes on a short-term basis. And I’m totally OK with that. I like a soothing salve as much as the next blogger. We’re not in so much for a straightforward and honest discussion of the options. That part bugs me more than a little.

Meanwhile, South Dakota is one of a handful of states that has any cash on hand (in the equivalent of bank accounts, not the easily accessible cookie jar) and the feds are about to send a dump truck full of money our way. Of course, the Legislature will have adjourned by then, that temporary sales tax increase loaded into the chamber.

How many years do you think it will take us to burn through the extra cash before we find ourselves right back in this structural deficit cage?

Beuhler?

4 Comments so far

  1. caheidelberger January 27th, 2009 11:02 pm

    Denise, I hear an unusual passion in your voice. I think impending motherhood suits your blog-voice well!

    And if the game you describe really is what’s afoot, I’m as disgusted as you.

    Welcome to the Hoghouse, Corey. So far this week, I’ve heard two top officials from two different state departments urging people to contact their legislators about programs being cut inside their departments with the line - “If they can find some additional revenue source, maybe this won’t have to happen.” These people report directly to and serve at the pleasure of Mike Rounds. I feel a bit like the Chesire cat at the mad hatterr’s tea party. -Denise

  2. Frank January 28th, 2009 9:45 am

    Why aren’t the Democrats going harder after the REDI fund and the Future fund? I’ve heard the “one time only money argument” but this seems better than some of the other programs cuts the Gov’s presented. Maybe he’s playing the legislators like a finely tuned instrument, but I don’t think the rest of the state is keeping his rhythm.
    I think a good expose’ about who’s gotten REDI and Future funds for the past 8 years or so would be very enlightening.

    I agree about the need for some reporting on REDI and Future, Frank. At the moment, I’m not in a position to devote the time it would take. But anybody with any piece of information is invited to e-mail me with it - denise@hoghouseblog.com. -Denise

  3. Stan Gibilisco January 30th, 2009 3:31 pm

    Denise, I keep reading and hearing about a “sales tax hike,” maybe a penny, maybe a ha’penny, maybe a tuppence, maybe temporary, maybe permanent; but so far, I’ve read it only from you and heard it only on SDPB.

    Where can I get more evidence?

    If a Republican Legislature and Governor ram through a sale-tax increase in the teeth of a recession, it’ll be a great boost for Stephanie Herseth-Sandlin if she wants to run for Governor in 2010. I can hear it now: “You tax-and-spend Republicans sure gotta lotta nerve.”

    And she’d have a point!

    I can’t believe it’ll happen. But then, way back in 1974, I couldn’t believe Nixon was a crook, either. Always the skeptic. But never the “genious” [sic].

    Oops, blogging in a hurry will do that to you - on the most inopportune words, too! (I fixed it now. WordPress has a spell-checker, but it’s cumbersome and so I rarely use it. Unwise of me.) Meanwhile, Pat Powers over at the SD War College blog had a post and lively discussion about this shortly after my post. And today the gov said he doubts the Legislature could muster the 2/3 vote needed to launch a temporary sales tax hike. We’ll see. Look for a post on that soon. -Denise

  4. Pat February 3rd, 2009 9:39 am

    Wondering if you know where i could find a list of legislative cracker barrel sessions in February….I am searching high and low and not finding any dates beyond the Sioux Falls dates. We are hoping to attend as many as possible to address the issues that you are discussing! Birth to Three….School for the Deaf….elderly care….what is going on??
    thanks for any help you can give!
    p

    Pat - In Rapid City, the remaining 2 crackerbarrels are Feb. 21 and March 7 on the SDSM&T campus. You might not want to wait that long. You might want to head to Pierre in the meantime. Otherwise, I’d check with local Chambers of Commerce for dates and locations. -Denise

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