Governor Kristi Noem’s primary and absolute promise at the beginning of this Legislative Session was, “We won’t raise taxes.”
The following bills facing the Crossover deadline tomorrow raise taxes:
House Bill 1209 imposes the wholesale tobacco tax on vapor products. Distributors and wholesalers who ship or produce in this state electronic cigarettes, electronic cigars, electronic cigarillos, electronic pipes, or similar devices and the nicotine-solution cartridges therefor shall pay 35% of the wholesale value of their vapor products to the state.
CDC research found that in 2016, South Dakota led the nation in monthly average sales rate of prefilled cartridges (1,641 units per 100,000 population) and in four-year rate of increase in sales (from 2012 to 2016, sales of prefilled cartridges increased 4,218% and sales of rechargeables increased 1,110%). The same study found the average retail price of one vaping unit in South Dakota in 2016 was $12.06. Arithmeticking those figures with a guesstimated 50% markup from wholesale to retail ($12.06 per unit × 2,352 units sold per month per 100K population × 12 months × 8.6 100K pop × 2/3 to get wholesale from retail × 35% tax) tells me we don’t even get $700K in new tax revenue by slapping the tobacco tax on vapor products. But where vapor product wholesalers currently pay zero tax, they’ll pay 35% tax if HB 1209 passes. That’s raising taxes.
House Bill 1251 imposes a “source market fee” on multi-jurisdictional out-of-state totalizator hubs. (Boy, give us one Supreme Court ruling saying we can collect taxes from out-of-state entities, and out swing the floodgates!) HB 1251 is Pierre and Aberdeen legislators’ plan to subsidize the failing horseracing club that runs spring races at the Pierre and Aberdeen tracks. It originally sought to raid the tourism promotion fund (because, you know, tourists come to South Dakota to watch horseracing) and take a little bigger cut of interstate wagering pools. Now it just says the state gets “five percent of gross receipts of all pari-mutuel wagering by South Dakota residents conducted by persons at out-of-state simulcast facilities” and gives that money to our two racing funds.
HB 1251 does not recoup the cost of providing a service to the totalizator hubs. HB 1251’s primary purpose is to raise revenue. HB 1251 is not a fee; it is a new tax.
Senate Bill 182 raises the maximum amount school boards can levy for special education from $1.567 per $1,000 value to $1.616. Requested by Governor Noem herself, SB 182 reveals that when Governor Noem said, “We won’t raise taxes,” she was using the royal we, as in she herself directly won’t raise your taxes, but she will make it possible for your school board to raise your taxes. She thus remains blameless for any tax increases that result from her bill, right?
SB 182 serves a need so clear and urgent, riding special education costs, that even anti-government extremist Senator Jeff Monroe says we need to take action. Taxing vapor products via HB 1209 may not bring in much revenue, and it may not deter use: in 2012, Minnesota imposed a 95% wholesale tax on e-cigs and still saw a subsequent increase in teen cigarette use. Subsidizing horse-racing with HB 1251 seems utterly frivolous.
But whatever their merits, all three bills raise taxes, something Governor Noem said we (and I prefer to use that term, spoken by the Governor to the people of South Dakota, to mean all of us) won’t do.
Over the past 40 years the republican legislators and governors have continually raised taxes and fees and yet they campaign against tax and spend liberals.
Sort of like Al Nostrap chuckling about breaking his transparency pledge. Can’t trust the word of a Republican.
GOPs have learned to pay attention to what their elected officials say, and to ignore what they do.
Raising taxes on a national level as well. Tax/steal and spend republicans https://www.politico.com/story/2019/02/23/tax-refunds-republicans-1182286
Your comments in regards to HB 1251 make it very obvious that you are obviously quite naive about the SD Horse Racing Industry, the mechanism that Governor Mickelson enacted over 30 years ago to fuel this SD agricultural industry or any aspect of this conversation for that matter.
As a lifelong SD agricultural producer and SD citizen , I am not angered by your ignorance but more so embarrassed by you lackadaisical approach to attempted journalism.
Feel free to contact me any time if you would like to acquire facts on this topic, I would be more than happy to provide this education at no cost.
I would also like to add that individuals such as yourself who make inaccurate assumptions based upon self contained opinions and then proceed to publish these fallacies have done irreparable damage to our great state and country.
In regards to HB 1251. I am very disappointed on your comments about the “failing horse racing industry”
and it is obvious you have no facts on the history of events that brought us to this point.
This is an effort to collect a fee from out of state vendors who provide a wagering service to residents of our state and will not cost our state or any of its residents one penny, and at the same time it will provide revenue for this industry in the great state of South Dakota. Please feel free to contact me for any necessary information.
Agricultural industry? hah heh ha Horse racing isn’t about farming or horses. Horses race so you can gamble on the outcome and hope like hell the jockey doesn’t cheat and the pony isn’t doped.
Bubby, consider yourself contacted. Tell us here how an industry is not failing when it is not making enough money to survive without a state subsidy.
Here are the 8 days total of the horse racing schedule for 2019 in Fort Pierre and Aberdeen. https://dor.sd.gov/Gaming/Horseracing/PDFs/2019horseracingschedule.pdf
Sorry boys, but if you all like this so much for this great country, get out of the saddle and find some sponsors other than us taxpayers to fund your failed folly.