Democrats are helping Republican Governor Dennis Daugaard tamp down any election-season concerns about the increase in tax collections the Governor has called on legislators to approve at the September 12 Special Session. Following Rep. Susan Wismer’s (D-1/Britton) sharp rebuke of anyone who calls enacting the Amazon/Wayfair remote online vendor sales tax a tax increase, economist and Senator Reynold Nesiba (D-15/Sioux Falls) says he doesn’t view the as-yet-unseen legislation from the Governor’s office as a tax increase:
If I buy a book at Amazon or through the Amazon marketplace… should I be able to buy that at a six and a half percent discount rather than buying it at Prairie Pages in Pierre or Barnes and Noble in Sioux Falls? Why should our brick-and-mortar stores be at a tax disadvantage because they’re here? I don’t see this—I see this as a way of leveling the playing field [Sen. Reynold Nesiba, transcribed from audio, “South Dakota Legislators Waiting on Special Session Details,” WNAX Radio, 2018.08.23].
Nesiba and Wismer both won their primaries and thus face no general-election pressure. They are free to talk sense about good policy without calculating how voters will react just weeks after passage. I agree that acting as soon as possible to enact the tax policy that Attorney General Marty Jackley barely convinced the Supreme Court to authorize for us in June.
But it is good policy—and Governor Daugaard is hastening to enact it with a Special Session—specifically because it puts more money in state coffers right now (well, not now now, but October 1, the blink of a policy eye). 2018s HB 1001 will increase the amount of tax revenue the state of South Dakota collects. I know we don’t want to call that a tax increase because some nervous Republicans can’t bear to admit, less than two weeks before South Dakotans start casting ballots, that putting more money in government coffers is good, and this bill won’t pass without lots of nervous Republican votes. Plus, if we call it a tax increase, we’d have to field two-thirds majorities to pass it, and that could increase the chances that a nervous Republican revolt would sink our shot at a few months of increased sales tax revenue. (But why worry: the original legislation seeking to conscript out-of-state online vendors as tax collectors for South Dakota, 2016 SB 106, passed unanimously in the 2016 Senate and with only two Nays in the House.)
The September Special Session will result, for a few months, at least, paying more sales tax than they would otherwise. The state’s tax revenues will increase. And in this case, that’s fine.
But apparently the outgoing Republican Governor needs safely incumbent Democrats to help tamp down that simple fiscal fact and sell his revenue-enhancement plan.