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Senators change minds, halt gold mine’s tax cut

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News Mitchell, 57301
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Mitchell South Dakota 120 South Lawler 57301

PIERRE — A $300,000 tax cut for the Wharf gold mine vanished into the political air Thursday.

State senators approved the changes Wednesday 18-16 but reconsidered their decision Thursday. Enough senators changed sides to kill the legislation 19-15.

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Sen. Bob Ewing, R-Spearfish, couldn’t stop the slide. “They’ve given back a lot to our community up there,” Ewing said about the last operating large-scale gold mine in the Black Hills.

He reminded senators that Wharf built a new public highway at the company’s expense and established a $1 million endowment. He said the mine has 160 employees and a payroll of $150 million.

“They still pay sales and use taxes, and the severance tax is on top of that,” Ewing said.

Sen. David Omdahl, R-Sioux Falls, said Wharf is an established business that’s existed for 31 years. “We can’t lose this company. We can’t kill a cash cow,” he said.

Engineering the reconsideration was Sen. Deb Peters, R-Hartford. She chairs the Legislature’s Joint Committee on Appropriations that oversees state government’s budget.

“That is the danger, changing tax policy for one business,” Peters said. She suggested state government has other options to help the company.

Gold mining is the oldest industry in South Dakota, according to Sen. Mark Kirkeby, R-Rapid City. He described Wharf as a neighbor asking for a helping hand.

“When times are good with gold, the state reaps the rewards. This company is asking for a little consideration,” Kirkeby said.

Sen. Al Novstrup, R-Aberdeen, said dollars can be spent only once by the Legislature. “Basically you’re voting to spend less on our priorities later,” Novstrup said.

Sen. Billie Sutton, D-Burke, said the legislators are setting a dangerous precedent for one private business. “The more we erode that, the less we can prioritize the things where we need even more,” Sutton said.

Ewing said it’s a good move to give up $300,000 in order to preserve $1 million of mining taxes from Wharf. “This is the last known surface gold mine in South Dakota,” he said.

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