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Governor vetoes bill to increase Deadwood tax

By Nora Hertel

PIERRE (AP) — South Dakota Gov. Dennis Daugaard vetoed a bill Tuesday that would have increased the hotel tax in Deadwood.

The bill would have allowed municipalities to tax $3 per night. The current rate is $2.

The increase would have brought in about $240,000 a year for marketing and promotions.

In a statement, the governor said it would be a mistake to make it easier for local governments to raise taxes. He said local officials can already increase tax revenue with the property tax opt-out.

The bill passed the House and Senate with narrow margins. Supporters said the change was necessary to support struggling communities. Opponents argued against a tax increase.

The main sponsor of the bill, Sen. Bob Ewing, said Tuesday that he knew there was a risk the bill would be vetoed because it raised a tax.

"I still think it's a very minor raise," the Republican from Spearfish said. He said it's a self-imposed tax and low compared with neighboring states.

Ewing hopes to override the veto with a two-thirds vote in both chambers, even though the votes have been close.

He said, "I'll do my best to try to convince everyone that it's worthwhile."

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