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HB 1284: Tax Advertising, Help Counties Fix Roads and Bridges

Rep. Caleb Finck
Find revenue, build roads and bridges… and make Cory do spreadsheets! That’s the way to legislate!

Representative Caleb Finck (R-21/Tripp) proposes House Bill 1284, which would do two things the Legislature is loath to do: repeal sales tax exemptions and give more money to the counties.

HB 1284 would remove advertising services from the laundry list of special interests whom we allow to skip paying sales tax. According to the Bureau of Finance and Management, we’re passing up $35,640,000 in sales tax this fiscal year alone on everything from the shouts of penile inadequacy and promises of pharmaceutical remasculation that bookend every three songs on commercial radio to the little sponsor badges in this humble blog’s sidebar.

HB 1284 would put that $35,640,000 in a new Road Improvement Priority Fund (yes! Let’s call it the RIP Fund!) and divvy it up among the counties to help them rebuild their crumbling roads and bridges. HB 1284 uses a remarkably complicated formula, the kind that can’t be thought up by a legislator spending all year creeping on transgender kids online or wiggling his cute little backside for the culture-war donors.

A third of the RIP money is divided up by population… but HB 1284 spends less per person on more populous counties, on the theory, I would presume, that counties with more people have economies of scale, more resources, and less need of state help rather than the theory that counties with more people have more cars, more roads, and more wear and tear thereupon. Finck proposes population brackets that reduce Minnehaha County’s RIP share by 35%, Pennington’s by 30%, Lincoln’s by 20%, and Brown’s, Brookings’s, Meade’s, Codington’s, and Lawrence’s by 10%. The other 58 counties, those with populations under 25,000, get full shares of this third of the RIP money. Minnehaha would get $2.01 million, Pennington would get $1.26 million, 25 counties would get six-figure checks, and the other 38, from Hamlin down to Jones, would get five-figure checks.

But that’s just a third of the RIP money. HB 1284 doles out another third of the RIP Fund based on road miles within each county, with different factors for road types. HB 1284 multiplies gravel miles by 50%, asphalt and graded miles by 15%, concrete miles by 10%, and unimproved and primitive miles by 5%. In other words, gravel roads get 3.3 times as much funding under HB 1284 as asphalt roads and 5 times as much as concrete roads. Run those multipliers on the state’s road inventory for each county (and I’m including primary, secondary, township, and city roads, because HB 1284 refers to roads “within a county”, with no apparent rural/urban distinction), and HB 1284 would send aid ranging from a low of $48,202 to Buffalo County to a high of $446,715 to Brown County. Representative Finck’s Bon Homme County* gets $157,226, the 37th-highest amount out of this tranche. This part of the formula spends an average of $159 per road-mile statewide, but that average varies from over $180 per mile in Butte and Sanborn counties down to $129 per mile in Minnehaha, $110 per mile in Todd, $109 per mile in Bennett, and $76 per mile in Oglala Lakota.

The final third of HB 1284’s RIP money would be dished out based on bridge deck area. There are no adjustment factors for condition here; HB 1284 just divides up the last $11.88 million based on each county’s share of the state’s total bridge deck area. Shares range from $1.56 million for Minnehaha and $947,000 for Pennington to $11,100 for McPherson and $10,200 for Clark. If counties spent this money strictly on 973 bridges that are in the poorest shape out of the 5,823 bridges total across the state, the RIP fund would disburse $12,200 toward each poor bridge. If I’m reading this federal data right, the cost of replacing a poor bridge in South Dakota in 2018 was $913,000.

(Naturally, I have a spreadsheet. Feel free to check my numbers and copy them for your own calculations.)

The RIP fund created by HB 1284 may be a drop in the bridge bucket, but counties will take every drip the state is willing to drop. The big question when Representative Finck takes his bill to House Taxation (which must have been waiting for my spreadsheet before scheduling HB 1284, so you’re welcome!) is whether the advertising lobby will be willing to pay for those improvements so UPS can deliver all those goods they advertise to Granny’s doorstep out on the county oil.

Correction 11:57 CST: An eager reader points out my confusion about Representative Finck’s home county. As I often do, I mixed up Tripp town with Tripp County. Finck lives in that slice of Bon Homme County that was gerrymandered westward into District 21. I regret the error and hope residents of neither Bon Homme nor Tripp County have taken offense.

16 Comments

  1. jerry 2020-02-18 08:55

    Caleb is onto something for sure. I think the drug store in Wall will knock it in the head though. Republicans do not tax Republican cash cows. But say if they did do that, that would mean they would have to zone those road signs so the land owner would not have to pay that tax. It looks to me like that would take county commissioners say so, but those are some big numbers that are surely needed.

  2. Cory Allen Heidelberger Post author | 2020-02-18 12:12

    If Wall Drug and other advertisers fight for their tax break, maybe we can offer to go halfsies: they cover half the cost, and we’ll get the rest from surcharges on heavy vehicles.

  3. jerry 2020-02-18 13:28

    Try pricing the cost of one of those advertising road signs from Lamar or other vendors. The cost per sign is north of $3,500.00 a year for just a basic sign. You then have to purchase the signage itself. Lots of bucks because of the “Highway Beautification Act” https://www.scenic.org/sign-control/highway-beautification-act/federal-state-agreements/

    Talk about a licence to steal, this one is it. There is a limit of what you can do, so the existing signs are like gold man, with no more building of them. Go get’um Caleb, you little rascal. Shake them up while they disappoint you.

  4. Debbo 2020-02-18 18:43

    What’s the reason for exempting advertising from sales tax? I doubt it’s an at risk industry. Makes no sense.

    Rep. Finck’s idea seems like a good one. It might enable counties to come up with a viable schedule for repairing roads and replacing bridges.

  5. jerry 2020-02-18 19:14

    Ms. Debbo, take a look around to see who benefits from that tax free advertising. I think you will find an R by their name…A big R that means rent free on chump’s back the Republican way in South Dakota.

  6. Jim peterson 2020-02-18 20:20

    He must have missed the Governor’s pledge to not increase taxes. We don’t need more taxes just an adjustment in priorities.

  7. jerry 2020-02-18 22:30

    Mr. Peterson, we need more taxes or else we need better horses and teams to get to the grocery store. Bridges are falling down, even in Rapid City, while others, in the state, are about ready to. Don’t get mad at Caleb, be proud of him for picking the scab. If you yourself don’t want more taxes, simplify it by having a state income tax. Tax advertising while we’re at it. Caleb might be wrong on some things, but he is right as rain on this.

  8. Cory Allen Heidelberger Post author | 2020-02-19 04:41

    $3500 a year? Last time I got billboards in town Lamar charged me $640 a month, plus $160 for printing and installing.

    There aren’t many billboards along county roads, but there is still some logic in taxing billboards, since those advertisements enjoy a visually captive audience thanks to the roads.

  9. Cory Allen Heidelberger Post author | 2020-02-19 04:43

    Jim, I’d like to say we could do everything that needs to be done just by shifting tax burdens, as you suggest. We certainly could use some shifting—tax advertising instead of food, for instance, and replace the regressive sales and property taxes with progressive income tax.

    However, the counties’ road and bridge needs make clear that we also need to raise more money to pay for the public goods and services we’ve been shorting for far too long.

  10. o 2020-02-19 11:46

    At the legislative cracker barrel at the Codington County Farm Show, Sen. Wiik (from the Appropriations Committee) spoke deeply about revenues and low taxes. After a series of questions about following the education funding formula requirement of 2%, and critical needs for town and townships to build/repair crumbling structures, and the highway quality/maintenance to go down, he asked the rhetorical question of who in the crowd wants their taxes to go up? My hand shot up – as did many in the crowd. I really do think that although “no new taxes” is the mantra for the right, residents of SD want quality of life/infrastructure needs addressed and understand that takes funding, funding they are willing to spend when the end result is clear. Certainly that was the experience of school funding and the the 1/2 penny sales tax.

    I disapprove of how the GOP underestimates the value of community and the will of the community to pay for projects of value. Far more of SD can think beyond a bumper sticker of “no new taxes” when honestly engaged in discussion.

    Re-evaluating priorities has become code for giving not-enough to everyone. As long as EVERYTHING is circling the drain, we are OK?

  11. Cory Allen Heidelberger Post author | 2020-02-19 11:56

    That’s a great example, O, of how lazy Republican legislators think they can boil statecraft down to a couple handy slogans. How did Senator Wiik respond when his rhetorical question elicited your and your neighbors’ response?

  12. o 2020-02-19 12:19

    I have been thinking about that question and response quite a bit lately. If Sen. Wiik had started with that question, I think there would have been no/few hands. But the question came after a pretty deep dive into needs people voiced seeing in their communities. His question did not get the answer he thought it would because it was put in context. Slogans and bumperstickers are never in context.

    Yankton, was able to pass a school funding opt out — even though they had also chosen to pay for an aquatic/pool project. Yankton is not some hot-bed of flaming liberal tax-and-spend liberals, but instead it is a community that when shown needs, rises to the occasion to make life better for its residents.

    Ate some point in time, doesn’t it become transparent that “no new taxes” is REALLY the haves saying that the have-nots are not their concern.

  13. jerry 2020-02-19 14:00

    Check out I-90 Cory, for not even a lighted one.

  14. Debbo 2020-02-19 14:58

    O, I believe you have hit the nail on the flat, squished out part.

    “no new taxes” is REALLY the haves saying that the have-nots are not their concern.

  15. Cory Allen Heidelberger Post author | 2020-02-19 19:56

    Yes, O makes a very important point. Left to their own devices, local voters don’t give a hoot about partisan issues. They want to talk about actual needs and practical ways to meet them. And a lot of the time, they find that working together through local government is a good way to meet those needs. That local experience of problem-solving through government is the most potent counterprogramming possible to the GOP/Reaganite/Trumpist propaganda that seeks to undermine faith in government. That’s why the SDGOP is working so hard to push partisan politics into local elections (see, for example, my post tonight on Alex Jensen’s run in Sioux Falls). They don’t want voters thinking practically, or thinking at all. They want picking up a ballot to invoke a Pavlovian reaction—election time! must vote R!

    Finck’s bill is classic local politics. We’ve got a problem—bad roads. How do we solve it? Raise some money, distribute it fairly, and get to work. There’s plenty of debate about the fairness of Finck’s formula—does Minnehaha County really need 35% less help to repave its county roads than Lake County does? But at least he has a formula, and it’s a complicated formula, one that took a fair amount of thought and spreadsheet drafting, and one that doesn’t boil down to any kind of slogan (Gravel Good, Big Towns Bad?). HB 1284 is the kind of bill that should take a whole day to debate in committee and another whole day on the floor. HB 1284 is worth more to the welfare of South Dakota and of intelligent political discourse than all seven of the culture-war bills Tony Randolph is sponsoring.

    I wish we could put a promise of no more bumper-sticker slogans on a bumper sticker. But it’s hard to campaign consistently for the political values O is promoting here.

  16. Scott 2020-02-19 20:25

    I hope this bill is something that gets serious consideration. I think back when I was young; county and township roads were generally better back then. I remember roads being graveled whereas now so many county roads have minimal gravel on them and when it rains the roads become difficult to travel. This can amount to safety issues.

    With the constantly increase in size of ag equipment and loads, county roads needs to be rebuilt to handle these larger loads. This bill would not fix all the problems, but at least it would allow for more maintenance to be done.

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