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Legislative committees diverge on county funding plans

PIERRE (AP) -- South Dakota counties won approval Wednesday from a Senate committee to receive a share of alcohol tax funds, but House lawmakers shot down a more substantial plan to allow counties to impose sales taxes.

PIERRE (AP) - South Dakota counties won approval Wednesday from a Senate committee to receive a share of alcohol tax funds, but House lawmakers shot down a more substantial plan to allow counties to impose sales taxes.

Supporters of additional funding for counties urged legislators on the House and Senate committees to recognize the lack of revenue options and escalating costs, frequently for courts and jails.

"It's something like a cancer that's growing out of control that we have to contend with," Minnehaha County Commissioner Jeff Barth said.

The Senate Local Government Committee unanimously approved a measure that would distribute a quarter of the revenue from an alcohol tax to the counties. The measure now heads to the full chamber.

Counties frequently deal with alcohol-related criminal costs, advocates said, so they should get a share. That tax brought in about $14.4 million last fiscal year.

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But in the House, the State Affairs committee overwhelmingly voted down the 1 percent county sales tax plan, which faced opposition from the state Department of Revenue. Republican Rep. Elizabeth May said she plans to try to revive the proposal later, though it could have some changes.

South Dakota counties get most of their revenue from property taxes, but state law limits yearly hikes. About 80 percent of county spending is required by law, which limits flexibility for officials searching for a balanced budget.

Hughes County Commissioner Tom Tveit told the House committee that his county faces a significant budget shortfall next year with dwindling reserves. He said funding for a 4-H program was eliminated after this year and that the county has seen ballooning mandatory spending on attorneys. The options, he said: "either quit doing things that are required by the state or find a new revenue source."

Jackson County is so understaffed, May said, that its auditor couldn't testify before the committee because the courthouse would have to close. She asked legislators what will happen if a county goes bankrupt.

"Somebody's going to have to pick up the tab," May said.

Republican Rep. Roger Solum, who voted to kill the sales tax plan, said it is "a little drastic" and that other measures under consideration could generate money for the counties.

A spokeswoman for Gov. Dennis Daugaard has said he opposes both measures considered Wednesday. The governor's office has also pointed to new road and bridge funding for local governments last session.

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