Among the bills crushed in Capitol crossover last week was House Bill 1309, Rep. Elizabeth May’s crafty plan to subject the $1.11 billion we give up in sales tax exemptions each year to quadrennial review. And interestingly, the Democratic caucus made that crushing possible.
HB 1309 went to the House floor Wednesday for a vote. Rep. May amended her hoghouse to expand the review to include exemptions under Chapter 10-46E, which sets excise tax on farm machinery, farm attachment units, and irrigation equipment. She also changed the reviewers from an interim committee to standing taxation committees. The House approved that amendment but then torpedoed the bill 31–34.
The Republican votes split all over the place. Businessman Rep. Steinhauer voted to review tax exemptions, but businessman Speaker Mickelson voted nay. Strong District 3 anti-tax conservative Rep. Kaiser wanted to dig into the exemptions, but strong District 3 anti-tax conservative Rep. Dennert said leave ’em be. Briefly spatting Rapid City Reps. DiSanto and Johnson both backed May’s proposal, but Black Hills Reps. Lust and Turbiville backed away.
The Dems, however, were far more united… in opposition. If you believe the GOP spin, you’d think Democrats would be all about digging into statute for more tax dollars and ways, as Rep. May originally proposed, to offset losses from repealing the food tax. But eight of nine Democrats in the House—Ahlers, Bartling, Bordeaux, Hawley, McCleerey, Ring, Smith, and Wismer—said no way, Liz May. Only Rep. Lesmeister voted to review our tax exemptions.
If five of those Democrats had changed their votes, HB 1309 would be headed for the Senate to pull more exemption enjoyers out of the woodwork. Whether the Democratic caucus had anything to gain by helping Rep. May is anyone’s guess, but had the caucus gone to May and said, “We can keep you bill alive,” they might have done some horsetrading, like maybe getting May and her conservative to peel a few votes away from SB 110 on First Amendment grounds.
But that opportunity has passed. Our willy-nilly tax exemptions, which equal 69% of the Governor’s proposed FY2019 general fund spending, will remain without regular, ongoing examination. And the question will remain: is an unexamined tax exemption worth having?
Have the Democrats united against HB1309 offered an explanation as to the rationale for their vote? Perhaps there’s some thought of letting the Republican regressive tax system fail on its own. Why help them tweek this failed system ensuring it’s survival? Being pragmatic by engaging in some horsetrading may have made sense, but I’m not sure anything related to abortion in this state is worth the effort at this time. To have any impact in Pierre on issues related to women’s reproductive rights, worker rights (labor laws, low wages especially for teachers), improving education, and reducing poverty, we must first elect more Democrats. Too many South Dakota voters (women, wage workers, teachers) continue to vote Republican against there own interests. The best way to win is to make Republicans defend their failed, and very unfair, tax system. 80% of South Dakotans just might receive a tax break if millionaires paid taxes at the same rate as everyone else. Yes, that may mean replacing our existing regressive taxes with a flat rate income tax. It’s just too easy for Republicans to keep raising regressive taxes on working families. Maybe I’m living in a dream world, but I really think that’s an issue to win on. What do we have to lose?
Not much, Nick!
I agree that there may have been no horses to trade. There may be plenty of reasons to stay out of this fight. Ultimately, we aren’t going to achieve our objectives until we win a plain majority in both houses and a governor to sign our bills.
But it is interesting to see a situation where Democrats could have changed the fate of a bill and to wonder what we might have gained by taking our votes the other way.
I agree, it is interesting to consider. Those opportunities occur so seldom.