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Blue Ribbon Panel Goal: Pay Teachers $48K. Blue Ribbon Plan: Reheat Regressive Sales Tax?

$48,000. 39th. $75 million.

Those are the parameters—not the plan, just the parameters—that the Blue Ribbon Task Force on Teachers and Students issued from their final meeting yesterday. Raise South Dakota’s average teacher pay from $40,023 to $48,000, a 20% increase. Lift our teacher pay ranking from 51st to 39th, between Kansas and Florida, still behind every neighboring state, and still below our historical best rank of 37th in 1945–1946. Multiply by the current K-12 teaching workforce of 9,362, and we need to raise or redirect $75 million in revenue.

Blue Ribbon co-chair Senator Deb Soholt (R-14/Sioux Falls) and her colleagues say more sales tax is the best option for raising that revenue. One idea floating is to impose a new half-penny sales tax, which would raise $104 million, then pair it with $30 million in property tax relief to make the pill go down.

So basically, Governor Dennis Daugaard delayed action on teacher pay for a full year to convene a 26-member panel to tell us what we already know (we’re short on teachers because we don’t pay them enough), propose some broad dollar goals that are bold in the context of teachers’ current dire economic situation but mediocre in the context of national and historical data, and weakly suggest the same regressive funding mechanism that Stan Adelstein, Joe Lowe, the Associated School Boards, and numerous other advocates have proposed over the past several years but which voters rejected in 2012 by a 57%–43% margin.

I’ve been to the Brown County Fair. 4-Hers don’t get blue ribbons for leftovers and lack of imagination.

If we’re going to spend all summer reheating old revenue ideas, why not go for a tax that doesn’t hit South Dakotans right in the pocketbook? Why not revisit Charlie Hoffman’s pipeline tax? Add up the maximum capacities of the currently pumping Keystone I and the proposed Keystone XL and Dakota Access pipelines: 19.91 million barrels of oil per day. Tax that oil at a dime a barrel, and South Dakota gets $72.7 million per year. We can make up the difference to $75 million out of petty cash and Shantel Krebs’s war on corruption. And if a dollar change in the price of a barrel of oil causes a 2.4-cent change in the price of a gallon of gasoline, then the dime a barrel we slap on the tar sands and crude shipped through our state would add 0.24 cents per gallon.

For perspective, in the last 12 months, I have put 173.4 gallons of gas in my VW Bug. A dime-a-barrel pipeline tax would have increased my one-year gasoline cost by 41.6 cents. A half-penny sales tax would take that much out of my pocket on one $83.24 purchase—one grocery trip to Walmart.

Senator Soholt says the Blue Ribboneers will review a final draft in the coming weeks to submit to the Governor in November. Maybe off mic, our Blue Ribboneers will work up the courage to put some creativity on the Governor’s desk.

7 Comments

  1. Nick Nemec 2015-10-30 07:43

    I like the idea of taxing oil pipelines, does doing so run afoul of the interstate commerce clause of the US Constitution? Are there any Federal court cases that address this issue?

  2. caheidelberger Post author | 2015-10-30 08:34

    Good question, Nick! First Google hit I get says the trickiest prong of the four-prong Interstate Commerce test for a pipeline tax to pass is the “Fair Apportionment” tax, which says the tax has to be linked only to the portion of the company’s business connected to the state to avoid the company’s facing a cumulative tax with every state along the route taxing the same oil. If not the oil, perhaps we impose a tax based on the energy used by the pumping stations in state.

    In Maryland v. Louisiana (1981), the Supreme Court ruled that Louisiana’s “First-Use” tax on natural gas pumped from the Gulf through their state to out-of-state consumers violated the Interstate Commerce clause. Hmm… can anyone find subsequent precedent carving out room for pipeline taxes?

  3. leslie 2015-10-30 10:11

    “shepardizing” the case at a local law library will reveal the cases’ subsequent citations perhaps giving light to the question.

    law clerks can do this. that is part of the reason the convenience of websites doesn’t yield up-to-date law. it takes work

  4. Paul Seamans 2015-10-30 10:12

    When Dakota Rural Action attempted to establish a spill fund by putting a two cents per barrel tax on interstate pipelines TransCanada had convinced legislators that the tax would interfere with interstate commerce. Maybe there is some way around that argument.

  5. leslie 2015-10-30 10:38

    $76 billion. 50th (“a more rank case…”). $400.

    $200 per sign( how many signs saying “Harney Peak” would have to be changed? answer: a couple). obtw, that 76B is just one gold mine.

    order of importance: education of south dakotans v. welfare of 80,000 South Dakota Indians.

    confused tourist: where the hell is the Harney Peak campground? :) really?

  6. Donald Pay 2015-10-30 12:01

    Failure. I think as we all predicted, South Dakota leadership lacks the courage to do what needs to be done.

    The “half-penny sales tax” is the standard solution that cowards in South Dakota hide behind. It’s been that way for decades. Cowardice is what’s for breakfast on the plate every one of South Dakota’s pretend leaders. The folks who don’t pay their fair share of taxes in South Dakota can never be expected to fork over a fair amount, oh, say, what their middle class neighbors do, in order to educate kids and pay teachers fairly.

    No, oh, no, you can’t have tax fairness, a great education system and fair salaries for teachers. That’s too much to expect from the so-called “leaders” in South Dakota.

    I always said this idea was worth about a half-penny, but since there is no such thing as a half-penny, it isn’t worth even that.

  7. LK Burghardt 2015-10-30 19:25

    This stinks! Make the legislators and administrators who corruptly accepted exorbitant consultant fees pay back the money they didn’t even show proof of earning and add that to the teacher pay fund. At this rate, I will NEVER return to teaching and my son will never return to SD to teach. South Dakota is corrupt and it’s time we, the tax paying citizens, demand an independent oversight committee to reclaim our tax dollars from our corrupt legislators! I’m sick and tired of my tax dollars being used to pad the pockets of our elected officials. The very same people who claim to be fighting for higher teacher pay (Rick Melmer, for example) are robbing us blind by accepting “consultant fees” with absolutely no proof of work done. It makes me absolutely sick to my stomach!

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