Schoenbeck, Senate state business kills sales tax relief as SD heads for ‘fiscal cliff’ – Dakota Free Press

The excitement over the passage of a real tax cut for all South Dakotans did not last long. Two days after the House passed a two-step state sales tax cut from 4.5% to 4.0%, Senate State Affairs seized on that tax relief and said: certainly not.

House Bill 1327 went to the State Affairs Senate on Friday and met Senate King Lee Schoenbeck standing in the doorway with his golf Club ax in hand.

“None of my friends ever said to me, ‘Hey, when is this sales tax going to go from 4.5% to 4%?’ Not one,” said Sen. Lee Schoenbeck, R-Watertown [Bob Mercer, “Senate Panel Nixes House Sales-Tax Cut,” KELO-TV, updated 2022.02.26].

It’s funny: Three of Schoenbeck’s Republican senator friends and ten of his Republican representative friends all testified before the committee that the sales tax should drop from 4.5% to 4% by July 1, 2023. Friends Schoenbeck’s corporate bodies also at Americans for Prosperity, which spent $339,423.39 to do all the work of Schoenbeck’s Voting Matters Committee to promote Schoenbeck’s Amendment C to prevent voters from raising taxes or spend money.

But Schoenbeck “broke his kneecaps” (his words!) to impose that extra half-penny sales tax in 2016, and he won’t let irresponsible ideology or wavering economic optimism snuff out that revenue stream. Like Governor Noem, Senator Schoenbeck knows that South Dakota’s surpluses are bogus and that our economy and budget are about to take a big hit now that federal pandemic stimulus funds have run out. Unlike Governor Noem, Senator Schoenbeck will say it right away:

The ongoing $150 million cut the House wants would boomerang off lawmakers and hurt state government, Schoenbeck warned, saying there will be “a predictable fiscal cliff when this federal fire hose will go out” as the COVID-19 pandemic ends. South Dakota has received more than $8 billion in federal coronavirus aid that has gone to governments, businesses and families [Mercer, 2022.02.26].

Senate State Affairs voted 8 to 1 to kill HB 1327. The only vote for HB 1327 came from Democratic Senator Troy Heinert, who said that even with this coming fiscal cliff, we could at least afford to relieve South Dakotas of the regressive food tax burden. South Dakota’s 4.5% sales tax will therefore remain in place, unchanged, preventing our teachers’ salaries from falling even further than the lofty goals of the 2016 Compromise.

Norman D. Briggs