Say, why don’t we take that $350-million surplus that Governor Noem has fabricated from our federal coronavirus relief dollars and do something good for South Dakotans, like exempting four-five years of sales tax on food?
Senator Troy Heinert (D-26/Mission) proposed Senate Bill 104 to roll back our sales tax on food by a percentage point a year, down to zero by July 1, 2025. We could easily cover the revenue shortfall from that family-friendly tax cut with those surplus dollars for the first four years, by which time the roaring economic recovery we’ll get from all those Fauci/Biden vaccines and four years of good government, not to mention the ongoing wind boom and a trend of in-migration that precedes our Governor’s coronavirus posing, should be providing ample revenues to replace the nickels we squeeze from each loaf of bread.
But no, no, no, says fairy God-princess and Revolutionary War reënactor Senator Jessica Castleberry (R-35/Rapid City), who voted with her Republican colleagues on Senate Taxation last week to once again kill this reasonable tax relief. This passionate conservative says we can’t run the risk of shrinking state government:
The main foible with this proposal to do away with our sales tax on groceries was the lack of any plan to replace the revenue that would be lost. Currently, that loss would be to the tune of around $70 million. South Dakota is only one of three states to tax our groceries at our full sales tax rate, however we are also one of nine states without a state income tax. Same arguments on both sides we’ve heard for years, duplicated complications, and at the end of the day, the same song and dance. This one is a good candidate for erroneous claims at election time that those on the the Senate Taxation Committee “raised” taxes for South Dakotans, because we didn’t approve a well-meaning, but ultimately defective approach to removing the sales tax on food.
As with proposals before, this one failed in the Senate Taxation Committee on February 3rd. We want to find ways to reduce taxes in South Dakota, but they must have practical implementation that won’t weaken our state funding in the long run [Sen. Jessica Castleberry, “Tax on Necessities? SD Sales Tax on Groceries and Other Considerations,” blog, 2021.02.05].
Hmm… Senator Castleberry says her party wants to reduce taxes, but offered a chance to do so, she says we can’t weaken state funding. She orates passionately about the danger of a strong state, but she declines to reduce taxes for fears of weakening the state.
What is your real position on taxes and state power, Senator Castleberry? Contrary to the fantasies stoked by our misappropriation of coronavirus relief dollars, we can’t expect the fiscal fairy to leave state revenues under the Governor’s pillow. Your formulation appears to forbid voting for any tax cut without voting for a concomitant tax increase. But Senator Heinert proposes to replace food tax dollar-for-dollar with a progressive income tax, you’ll start screaming party slogans at tax-and-spend Troy. So do you really support tax cuts and smaller government? Or are you just committed to locking South Dakota into status-quo taxation policy forever? Is there any logical, consistent path for translating the things you say on the campaign trail into actual policy reform?
Oh well: Senator Castleberry will continue to keep her state robust with spare change taken out of our pockets when we buy soup.