The Legislature has proven in the recent past it will ignore its laws, such as the mandatory inflationary increase for K-12 state aid, when it wants. We’re at that point again in the 2017 legislative session, as school officials pray they’ll see the 0.3 percent increase due. Money is tight this session, and that led to a proposed raid on retailers Monday.
The House appropriations chairman, Rep. David Anderson, R-Hudson, convinced Republicans on the House State Affairs Committee to put a bill into play for this final week that would allow a reduction in the retailers’ collection allowance. That’s the 1.5 percent they’re allowed to keep for collecting and remitting sales tax, up to $70 maximum per month.
At this point SB 106 would reduce the allowance to 1.4 percent. Anderson wants to keep the legislation alive so it could be used to help balance the state budget come the end of this week. Friday marks the final day of the main run of the 2017 session. Overall the collection allowance is worth about $5 million.
That could pay for the state aid to schools inflation increase (or something else). Or the Legislature could do as it has in the past and skip the increase. If it’s a law, the legislators can write a new law skipping the payment. If the inflation increase was in the state constitution, legislators couldn’t skip it. It would take a statewide vote to amend the constitution in that way.
Meanwhile the Anderson amendment points out another situation. The Legislature this session seemed to have an abnormally high number of “vehicle” bills or carcasses or shells that awaited some totally new measure to be amended. That’s one version of a hoghouse, where a bill is gutted of its contents and new language is inserted.
Anderson used SB 106, which was introduced by Sen. Ryan Maher, R-isabel, and Rep. Kent Peterson, R-Salem. They are the Republican assistant leaders in their respective chambers. SB 106 originally contained one sentence: “The Legislature shall pursue opportunities to enhance the state.” Now it’s an attempt to repeal at least part of the retailers’ sales-tax collection allowance.
But that’s not the end of it. The Anderson amendment also could steer collection-allowance revenue away from retailers into the Building South Dakota programs. They were created by the Legislature in a power play against Gov. Dennis Daugaard a few years ago.
Legislators took half of the unclaimed property that is turned over to the state treasury and began spending it on BSD programs for housing, training and local projects. The governor came back a year later with a $30 million lump sum intended to cover three years of the programs. The Legislature approved that deal. Now legislators realize the $30 million is about to run out and they don’t have a replacement source of funding.
This is a little bit like the scheme underway to create an agriculture development fund through property taxes. Agricultural property received some tax relief through the half-percent sales-tax increase approved by the Legislature at the governor’s urging in 2016. Agricultural interests don’t want to pay higher fees to provide revenue for a new animal-disease laboratory sought at South Dakota State University.
So there’s a move afoot in the Legislature to take away the agricultural property tax relief from 2016 — meaning the general-education levy on farm and ranch land would be slightly higher — and put the revenue in a new fund for agriculture development. The fund in turn could cover the $3 million annual bond payment for the SDSU lab and provide several million dollars for other uses in the ag sector.
These final five working days of the main run of the 2017 session will bear close watching.