The SD legislature is in session again. Out of Pierre comes a blizzard of sense and nonsense...unfortunately more of the latter. Taxes bring out all the social tribal thinking and both right and left political correctness.
Most likely what I write below will be studiously ignored in the spirit of intentional ignorance that is part of social tribalism, but anyway.
First, too many years ago, I worked with SD:ASAP which was the highway alcohol safety project. At that time I used data from an insurance database if my memory is correct on the social costs of alcohol-related highway crash fatalities, injuries, etc. Then I dug out all tax revenues that I could determine were collected by state and local governments. Those revenues did not even cover one-third of the social costs. I doubt the ratio is even that good now even if alcohol-related highway crash fatalities have been reduced. Now, SD counties are finally figuring out that in addition to the social costs, there are court, prosecution, treatment, etc. etc. that cost counties $millions. So, counties want a share of the existing alcohol taxes. A better option is to double the taxes on alcohol and put THAT extra revenue into the counties and city governments that bear the primary and completely unnecessary costs due to alcohol sales and consumption.
Next, let us look at roads and bridges and the idea of wheel taxes, special taxes on electric cars, increased license and registration fees for cars and pickups, etc. These taxes are plenty high already for light weight vehicles. Where the taxes are woefully too low in that on heavy vehicles on the highways. Highway engineers and others have told me that a loaded semi-tractor and trailer do about 15,000 times as much highway damage per mile of travel as do light cars and trucks. People who apparently are not aware of this think that nothing could be fairer than wheel taxes and license fees on cars. This is logical and tax nonsense. We don't need heavier, better bridges because 2000 to 4000 pound vehicles cross them, we need them because of the trucks and buses moving many tons of load in addition to their own weight which greatly exceeds that of cars. Before another nickel should be mulcted out of the owners of small vehicles, the revenues from heavy trucks should be greatly increased.
And now to education and funding... The so-called Governor's Blue Ribbon commission on education missed several very salient facts and data bits or grossly underplayed them in their desire to get taxes increased for education. First of these facts are the huge unnecessary fund reserves most schools have languishing in bank accounts instead of paying teachers or otherwise improving actual education A recent Bob Mercer article about Gov. Daugaard's concerns noted that there was something in the area of $425 million in general funds and asset funds sitting as reserves in school accounts. . That is just in two of the school accounts South Dakota schools also have $144 million sitting in federal impact funds. The feds have dumped $155 million into SD schools in the last three years. Only about $13 million of that has done anything for South Dakota K-12 education. There are other funds, but I don't now have all that data, but have been told that the total is actually over $600 million. In short, we do not need a new tax for schools.
What do we need to improve K-12 education? Get school boards and administrators off their monument building project hobby horses and use the money to actually educate students. There is enough money sitting in South Dakota banks holding school funds to increase teacher pay for a few years. And, if controls are not put on property tax collections, those reserve funds will continue to increase.
In the way of controls that do nothing is one mentioned in Bob Mercer's article as being presented by Gov. Daugaard. That is limiting capital asset funds to $2850 per student. There are nearly 130,000 K-12 students in South Dakota. Multiply those two numbers and we get something like $370 Million. That amount is more than is now held in those overloaded accounts. This "limitation" is political theater or smoke and mirrors.
The Bob Mercer article also implicitly indicated that all the tinkering with school accounts and previous "caps" is part of past and current mess with school funding and accounts. The accounting system and structure needs to be changed before any more increases, decreases, or whatever. The accounts need to consider cash balances month by month in a more business-like manner. The Capital Assets account should become a Capital Maintenance account to show fuel, power, maintence, care costs. A separate Capital Acquisition account should be the only account that can hold or disburse funds for building or acquiring new assets. Tax revenue can only be collected and assigned to this account if district voters have voted prior approval for a new project of a specific estimated cost and need.
I am sure accountants can come up with much better ideas for adding teeth and transparency to education taxation and funding than I can. Legislators need to take note of failures of the current system and decide to clean up that mess before they dump a single dime more into K-12 education. In any case, the grotesquely large reserves mean that NO SALES TAX INCREASE is necessary no matter how Gov. Daugaard spins the issue or the Blue Ribbon commission story. Even if there would be no increase, there is so much slop in education that multiple approaches other than a tax increase should come first.
And, while discussing the unnecessary sales tax increase, let us note a bit of deception that has been used every time there has been a push for a sales tax increase or broadening. The argument intentionally mixes the tax rate with the tax increase. The rate increase may be "only 1/2 percent", but the actual tax increase is 12.5% . The Democrats are pushing for even more. A so-called "1% increase" is the rate increase. The actual tax increase would be 25%. You can dig up the information in state data, but do not be deceived, either of these is an unneeded tax increase and selling it as a one or two percent increase is just plan deceptive. Either of these poorly thought-out increases is completely unnecessary until school reserve funds are first used and in the meantime, real caps or limits on property tax increases are put into place.
And to add a little more something else to this, Mexico has found that higher taxes on soda pop reduces obesity and diabetes. If any other tax should be increased, it is that tax on soft drinks. Soft sweet drinks, whether sweetened artificially or "naturally" are all actually hard on your health and add a truckload of unnecessary social and medical costs as a consequence. If any sales tax should be increased, it should be the sales tax on soft drinks. Other ideas for increasing it are specious.
***Stay tuned and ignore the social tribal political correctness nonsense--- Doug Wiken