When the South Dakota Legislature created the Building South Dakota economic development fund in 2013, I responded with ambivalence: the program resulted from Democrats’ successful use of the voter referendum to repeal an earlier, less fair economic development program and force the GOP majority to include some progressive Democratic policies in the legislation, but Building South Dakota still fed South Dakota’s addiction to corporate welfare.
That addiction may not afflict every South Dakota businessperson. Two years later, Bob Mercer reports that smaller businesses are not taking advantage of Building South Dakota’s tax breaks:
The business and housing assistance programs created three years ago as part of the Building South Dakota program saw big demand so far. But one designed specifically to offer tax breaks for smaller business projects has found few takers.
There have been two grants totaling $36,480 for equipment upgrades by Yankton-area businesses Sapa Extrusions Inc. and TruXedo Inc. Meanwhile, the program’s fund balance has grown to more than $1.3 million.
The grants, which are essentially refunds of sales and use tax, are available to businesses with projects smaller than $20 million or purchasing equipment for less than $2 million.
Pat Costello, state commissioner of economic development, told a panel of legislators Tuesday businesses “haven’t found a tremendous lot of value” in the program [Bob Mercer, “Small Businesses Not Using Tax-Break Program in South Dakota,” Aberdeen American News, 2015.08.26].
The Reinvestment Payment Program handed nine corporate welfare checks to companies for bigger projects in 2014 and three in 2013. But smaller operators seem able to pay their own way, without taking corporate welfare.
Crony capital points its fork at small business’s plate and says, you gonna eat that?
Costello told members of the Legislature’s Government Operations and Audit Committee that a legislator — Rep. Dick Werner, R-Huron — suggested there be consideration to allow funds to be transferred between Building South Dakota’s various programs.
Costello said that could be helpful in making best use of the money, so large amounts aren’t mothballed. He said it could work both ways for a program. “In future years, it may reverse itself,” he said [Mercer, 2015.08.26].
Do call me when the big boys leave free state money on the table for the small fry.