Rejection of sales tax increase was not surprising
Published: Thursday, November 15th, 2012
Initiated Measure 15 would have increased the state sales tax 25 percent, from 4 percent to 5 percent, with the estimated $180 million annual revenue split between K-12 public schools and Medicaid. The measure was soundly defeated statewide by a margin of 56.72 percent to 43.28 percent, or 198,531 to 151,466.
The vote against the initiated measure should not be seen as a vote against education or the medical community in the state. Rather it should be seen as a rejection of a permanent increase in the state sales tax by 25 percent. For this reason, the rejection of Initiated Measure 15 should not be a surprise by any stretch of the imagination.
Also, the measure did not make clear how the $90 million for school districts and $90 million for Medicaid would be spent or who would determine where it would be spent. For education, the measure said the funds would “be spent on improving education as school boards determine.” For Medicaid, it said “funds will be spent only on payments to Medicaid providers and related state expenses.”
Many voters apparently were not comfortable with paying $180 million annually in new taxes and not knowing exactly how the money would be spent. “Improving education” leaves the door wide open for any school district expenditure. And, many voters realize that the number of students in most school districts is dropping while money for education keeps increasing.
Money designated for Medicaid would have gone to providers like hospitals and doctors, but many voters did not know for sure what “related state expenses” were involved in the initiated measure. Taxpayers generally want to know how and where their tax dollars are being spent. That’s why the state legislature is required to come up with a budget that includes income and expenditures.
We believe that any additional tax revenue in South Dakota should be handled by our elected state lawmakers and not by any non-elected groups of individuals. Our elected officials are responsible to their constituents who can replace them if they deem their tax dollars are not being spent in a responsible manner.
These are just a few of the reasons that Initiated Measure 15 may have failed on Nov. 6, but the main reason we believe it did not pass is because it would have raised the state sales tax by 25 percent. The majority of state residents may have believed that this is not the time to be raising the sales tax in an uncertain economy.
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