There was mild surprise when the state Senate approved SB 135 on Feb. 9 by a 19-14 vote. The Daugaard administration opposes allowing cities to add another 1 percent of municipal sales tax. The 19-14 vote is important because a two-thirds majority of 24 would be necessary in the Senate to override a veto. Therefore the question arises: Does it matter whether the state House of Representatives approves the bill?
The proposal from the South Dakota Municipal League would allow a city commission or council to approve an ordinance adding the 1 percent tax for a specific purpose and for a specific time. The tax would have to be specifically extended by another ordinance for more time and that would be subject to public vote.
The only opponents to this bill, whose prime sponsor is Sen. Corey Brown, R-Gettysburg, during the Senate State Affairs Committee hearing on Feb. 4 were the National Federation of Independent Business lobbyist Bob Riter of Pierre and the state Revenue Department’s No. 2 man, David Wiest. They’re up against every legislator whose mayor back home wants this additional 1 percent of taxing authority. Sioux Falls, Brookings, Parker, Spearfish, Yankton, Keystone and Sturgis had people speak at the hearing. The committee vote that day was 6-2.
What happens to SB 135 in the House isn’t clear. Its lead House sponsor is a former mayor, Rep. Scott Munsterman, R-Brookings. The House speaker, Dean Wink, R-Howes, originally assigned the bill to the House Taxation Committee. Wink is a co-sponsor of the bill. The tax committee didn’t seem like the worst place for it to land, with plenty of co-sponsors on the panel, such as Mary Duvall, R-Pierre; Don Haggar, R-Sioux Falls; Patrick Kirschman, D-Sioux Falls; Nancy Rasmussen, R-Hurley; Tona Rozum, R-Mitchell; and Mark Willadsen, R-Sioux Falls. But on Wednesday, one day before the scheduled hearing in tax committee, House Republican leader Brian Gosch of Rapid City called on Speaker Wink to have the bill referred to the House State Affairs Committee instead.
Gosch, who didn’t sign onto the bill as a co-sponsor, is chairman of the state affairs committee. A similar move was made regarding the governor’s legislation for highway and bridge funding, transferring it from the House Transportation Committee to state affairs, where on the final day for possible action the governor’s bill was killed 13-0. The state affairs committee is also where Rep. Mark Mickelson, R-Sioux Falls, took control of a Democratic-only sponsored bill and turned it into his legislation allowing school districts to start levying a portion of capital outlay tax specifically to support technical institutes. So who knows whether something might be afoot on the city sales-tax bill.
The state affairs panel however does have plenty of the sales-tax bill’s co-sponsors among its members, including Munsterman; Haggar; House Democratic leader Spencer Hawley of Brookings; Kris Langer, R-Dell Rapids; Mike Stevens, R-Yankton; Mike Verchio, R-Hill City; and Wink. That’s a majority of seven on a 13-member committee, meaning it’s highly possible the bill wins a do-pass recommendation that sends it to the full House for debate.
So far the bill isn’t scheduled (at least not publicly) for its hearing yet. State affairs members had 24 bills requiring hearings as of Thursday evening. Those include the juvenile justice package in SB 73 and the Senate version of the highway and bridge funding package in SB 1. Including today’s meeting (Friday, Feb. 27), the House State Affairs Committee has four meeting days left, unless a special meeting is added.
As for how the Senate voted on SB 135, you can see that tally here.