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Dems Hijack Partridge Backtrack; ‘Pubs Help Revive Food Tax Break

Senate Bill 86, the Partridge Backtrack, has turned into the 2018 Nesiba food-tax break.

House Taxation’s hearing on SB 86 started normally enough yesterday, with Senator Jeff Partridge (R-34/Rapid City) sonorously urging the panel to clarify and roll back his 2016 sales tax amendment and make optional the promised sales tax rate reduction based on new remote-seller sales tax revenue. Senator Partridge tendered an amendment to make SB 86 sound a little firmer: instead of saying that Joint Appropriations “may” introduce legislation reducing the sales tax rate based on sufficiently high revenues, Partridge is willing to see SB 86 say Joint Appropriations “shall” introduce such revenue. Partridge still isn’t mandating the rate reduction, the way the 2016 Partridge Amendment intended; changing “shall” to “may” only requires that the Legislature have the debate.

Partridge had the Noem Administration behind him, in the form of Revenue Secretary Jim Terwilliger, who said SB 86 is fine with him. He got the Chamber tandem, State and Sioux Falls, in the form of the Owen tandem, David and Debra, to say go for it.

Former gubernatorial advisor quickly-turned lobbyist Nathan Sanderson said the Retailers Association opposes changing the sales tax rate every year, which requires “cost, time, energy, and effort which our retail members would prefer not to go through.” Sanderson said retailers were able to adapt to the two sales tax rate changes since 1969, but the blanch at jiggling their rates every year. “It’s a real pain in the butt,” said Sanderson.

Senator Partridge said his Backtrack should “solve” the Retailers anticipatory agony by removing the automatic rate change his 2016 Amendment envisioned and offering the Retailers and everyone else a chance to debate any possible rate change.

Ring and Duba hijack SB 86
Coming soon to a committee hearing near you…

House Taxation asked a few questions. Then hapless Democrats spoke up. Representative Ray Ring (D-17/Vermillion) moved, and Representative Linda Duba (D-15/Sioux Falls) seconded, a hoghouse substitute amendment to strip Partridge’s language and replace it with Nesiba’s 2018 language assigning every $20 million in new remote-seller sales tax revenue to reduce the tax on food by one percentage point. Ring and Duba also included language to exclude tobacco, alcohol, pop, vending machine chow, and dietary supplements from that break. “You all know how important it is to reduce the sales tax on food,” said Rep. Ring, “because we have a very regressive tax structure, and this would help to reduce the regressivity.”

And then, by gum, the hapless Dems had some hap. Republican Representatives Dennert, Pischke, Schoenfish, Mills, and Chris Johnson backed the motion. Republican Representatives Willadsen, Reed, Olson, David Johnson, Duvall, and Chaffee opposed it. That’s 7–6. Amendment passes.

Shocked by the bipartisan success of a Democratic ploy, Rep. Kirk Chaffee (R-29/Whitewood) tried deferring the new food tax break to House State Affairs, where Republican Speaker Haugaard and Republican Majority Leader Qualm would surely stamp out this outbreak of progressive taxation. Rep. Kyle Schoenfish (R-19/Scotland) sensibly (!) pointed out that even as amended, SB 86 is still a taxation bill, perfectly within House Taxation’s wheelhouse. Chairman Willadsen urged the committee to boot the bill over for another hearing, but the Ring Ring resisted, and the motion to State Affairs failed. The best the balkers got was a motion to defer action until the next House Taxation meeting—[UPDATE 21:29 CST: Ah! But then Rep. Qualm went to the House floor Thursday afternoon and got a majority to support his motion to refer SB 86 to House State Affairs. So much for letting the committees decide bills themselves. As Cathy notes below, SB 86 comes up bright and early Monday morning, 7:45, in Capitol Room 414, before the House State Affairs Committee that the cranky Majority Leader Qualm chairs.

Senate Taxation killed Nesiba’s food tax reduction plan with kindness last year, with Republicans acknowledging that using the remote-seller tax windfall to give South Dakotans a few pennies off peanut butter sounded pretty good. Apparently the wisdom of cutting the food tax has sunk in with a few Republicans. Let’s see if that wisdom can withstand a long weekend of cussing out by the Majority Leader and the Speaker and reach the House floor.

10 Comments

  1. Debbo 2019-03-01

    Let’s hear it for the apparently happed Democrats! It’s good to have haps. This outcome has probably flabbered the SDGOP and after a week of pondering how to undo this Democratic success, I imagine they’ll find a way to kill it next week.

    Remember, it’s not about the citizens of SD, it’s about keeping Davie and Chuckie happy!

  2. John Kennedy Claussen, Sr., 2019-03-01

    Such fate for now has made the Republicans appear to be nothing more than ‘The Last King of Scotland.’ And history is often not good to those kingdoms, that do not play the taxation card appropriately through too much appropriation and self-indulgence.

    https://www.youtube.com/watch?v=iV_QgKJFZP0

  3. Cathy B 2019-03-01

    House State Affairs agenda says SB86 is up there on Monday, March 4, at 7:45am (6:45Mt time). I’m so proud of the House Taxation, but it appears it is sent over to H.St.Affairs after all. How did that happen?? The H.Taxation minutes show that the vote to send it to H.St.Affairs failed, 6-7. Wait! Here it is: I see in the minutes of the House floor session yesterday(2/28), it says “Rep. Qualm moved that SB 86 be referred from the Committee on Taxation to the Committee on State Affairs. Which motion prevailed.” So there it is on Monday morning. Now let’s ask the Rep’s on H.St.Affairs to keep the food tax cut in SB86. For the story on why this makes so much sense, see the food tax article on http://www.breadSD.org.

  4. Jason 2019-03-01

    What is the average yearly grocery bill for a family of 4 in South Dakota who aren’t eating Steak and Lobster every week?

  5. Cory Allen Heidelberger Post author | 2019-03-02

    Less, I’m sure, than the amount the Trump class spends on caviar and yachts but which seems irrelevant when we argue against tax breaks for the rich.

    But to the point, USDA’s January 2019 report says a family of four on a low-cost grocery plan can eat on $720 to $850 a month, or $8,640 to $10,200 a year. At 4.5%, those families would pay $389 to $459 a year. Each percentage point drop by SB 86 saves each family $39 to $46 a year.

  6. Cory Allen Heidelberger Post author | 2019-03-02

    Jason, you do support tax relief for every South Dakotan, right?

  7. Jason 2019-03-02

    Correct Cory. That’s why I think the sales tax should go back to 4%.

  8. Cathy B 2019-03-02

    Just so people know: It was the grocery tax that went up in order to comply with tax rules that enabled SD now to collect tax on more online sales — only the tax on groceries. Now SD’ans have been paying more for food for 15 years to get SD to this point. That’s why the fair thing now is for the next tax cut to be directed to food.

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