Group plans initiated measure to hike the South Dakota sales tax

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SIOUX FALLS — A group of advocates for health care providers and public schools is moving forward with plans to initiate a ballot measure that would permanently raise South Dakota’s sales tax by 1 percent.

The coalition polled likely voters on their appetite for a tax increase in the wake of deep cuts in state spending during this year’s Legislature.

“South Dakotans want the opportunity to vote on the issue,” said Dave Hewett, president of the state Association of Health Care Organizations.

Proposed language for an initiated measure will be submitted to the Legislative Research Council for review by early next week, Hewett said. After the attorney general prepares a title and explanation for the measure, sponsors will begin trying to collect the 15,855 signatures needed to put the matter on the November 2012 ballot.

Raising the state sales tax from 4 percent to 5 percent would raise about $175 million per year, according to proponents. They have not specified how the money would be doled out.

Sioux Falls School Board President Kent Alberty said he prefers a constitutional amendment, which would guarantee the tax proceeds would be spent as sponsors intended.

“An initiated measure would give the Legislature the ability to tinker with the wording, if not the intent,” he said.

Sen. Stan Adelstein, RRapid City, sponsored legislation during the last session that would have raised the sales tax during only the summer months for the next three years.

The bill died in committee, but Adelstein said he might try again in 2013 if an initiated measure passes.

Adelstein said the past session’s cuts — 6.6 percent to education and between 4.5 percent and 11.5 percent to Medicaid providers — have “done terrible damage this year to those least able to take the damage.”

However, he said he thinks the damage could be reversed through a temporary sales tax.

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