This isn't the time for tax increases in South Dakota
Gov. Mike Rounds sent more signals to the public, indicating sales tax collections are down and the state will be challenged in balancing the budget.
He gave the first warnings during his annual budget address in early December and we'll hear more in coming weeks as South Dakota's legislative session gets under way.
South Dakota's Constitution requires a balanced budget each year, although that doesn't mean income and expenses need to match. Money can be taken from various state reserve accounts to balance the budget.
Rounds said in his budget address in December that he would recommend to the legislature to again use reserves to balance the budget, although those accounts are dwindling.
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So when legislators start hammering away at the budget for 2009-2010, some will attempt to solve the problem with a simple concept: raise taxes.
We recognize and admire the necessity of balancing the budget, but we don't think increasing taxes is the way to do it. The better solution is for state government to get leaner and cut out spending.
If the economy is soft, and sales tax revenues are down, state government must spend less. This is the worst time to boost the tax burden on South Dakota individuals and businesses.
While the state sales tax is among the broadest in the country, there are still important exceptions. We've already seen a draft of a bill to "repeal" some of these exceptions, effectively adding a sales tax where there isn't one now.
We should be prepared to talk with our legislators when they hold cracker-barrel sessions about these proposed tax increases. Our legislators are also willing to read e-mails, faxes or letters on relevant topics, and this seems like an important enough issue to discuss.
This is not the time for tax increases in South Dakota, and we should expect our legislators to pass bills that can be paid with the money they have.
Madison Daily Leader
