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Taxing tobacco for technical education

A new ballot measure could burn a hole in some smokers' pockets, but area officials believe it'll be largely beneficial for South Dakota's technical schools.

Petitions for a ballot measure that would increase the state tax on tobacco products sold in South Dakota to generate revenue for the state's four tech institutes has begun circulating in Mitchell.

Brought forth by House Speaker Mark Mickelson, the measure would place a $1 tax increase on 20-pack cigarettes, while tax on other tobacco products, such as cigars or chewing tobacco would increase from 35 percent of wholesale price to 55 percent. It also creates a fund for South Dakota's four technical institutes — Mitchell Technical Institute, Lake Area Technical Institute, Southeast Technical Institute and Western Dakota Technical Institute — to help reduce tuition and create more opportunities for workforce training.

And with Mitchell Technical Institute sitting in the Mitchell community's backyard, it's a "matter of mobilizing" members to garner support for the measure, according to Lori Essig, the workforce development coordinator for the Mitchell Area Development Corporation (MADC).

"From the Mitchell perspective, we see this as a workforce development issue, and since the tuition rate at technical schools in South Dakota is higher than the surrounding states, we think this might be a great way for us to encourage more students to choose South Dakota for their technical school education," Essig said.

Mickelson said the community in Mitchell is built around MTI, with Trail King and Muth Electric often using the pool of Mitchell Tech graduates to develop their workforces.

"So when you start looking around the jobs in your community, you live in a perfect example of a community whose industry is tied to Mitchell Tech," Mickelson said.

And, Mickelson said, it was MTI's former president Greg Von Wald who helped lay some of the foundation for what would become Mickelson's measure. Mickelson said Von Wald helped highlight the fact that tuition for tech schools in South Dakota was more than double the tuition in Nebraska.

The average in-district tuition and fees for South Dakota technical schools is $6,320, while Minnesota sits at $5,380 and North Dakota at $4,400, according to the MADC. Other nearby states include Nebraska at $2,980 and Wyoming at $2,990.

The ballot measure would require the next $20 million of tobacco tax revenue to be deposited into the technical institute fund and be administered by the recently established South Dakota Board of Technical Education.

To be placed on the ballot for the November 2018 general election, the measure requires 13,871 signatures by Nov. 6. And with less than two months before the deadline, Essig said the MADC is working to get more area support.

"We're trying to be in touch with the people who have a vested interested in this, in other words the industries in town that have higher technical school graduates as well as technical school employees," Essig said. " ... This kind of thing I think is always a challenge because some people aren't always comfortable in being in that role."

But with nearly 14,000 signatures needed, and the support community members have already shown for Mitchell Technical Institute in the past, Essig said she's confident it'll make it onto the November 2018 ballot.

And even though Essig has has several people "willing to sign" at recent events, including the Corn Palace Festival, she knows there will still be some opposition.

"It's like with anything, I think there are people who fall on both sides of it," Essig said. "From a Mitchell standpoint and a workforce development standpoint, there's certainly value in helping get this on the ballot so voters in South Dakota can make the decision."

As for the opponents of the measure, like Americans for Prosperity, Mickelson is open to hearing their solution to simultaneously reduce the amount of smokers in the state while increasing technical education funding.

"And all they're doing right now is kind of throwing rocks at my good ideas, and I'm more than happy to listen to what their suggestions are to solve the problem," Mickelson said.

Mickelson said he's ready to hear a solution, if Americans for Prosperity has one.

"That would be my question for Americans for Prosperity, otherwise all he's doing is being paid to be someone else's mouthpiece who's a long way away from the problem," Mickelson said, referencing former legislator Don Haggar's column. "And it sounds to me he might be representing out-of-state interests."