Vote ‘No’ on repeal of food tax


Editorial Board

The Issue: Voters will decide whether to keep the food tax Nov. 2.

Our View: Funds from tax necessary to run our state.

Apart from the many candidates up for election, South Dakota voters will decide three measures on the Nov. 2 ballot.

We explained these measures in a table on page 4 of this week’s Collegian.

There are two constitutional amendments. One changes how judges are selected, and another changes the constitution’s language regarding state expenditures for non-public schools. The third is an initiated measure that would repeal the sales tax on food.

Let’s take a look at the last one.

Repeal of the sales tax on food – Initiated Measure 1- should be rejected for primarily two reasons.

First, practicality.

If voters repeal this tax, the state and other governmental entities will lose about $62 million in revenue.

South Dakota government alone will see its revenues drop by about $40 million – the amount generated to the state by its present 4 percent tax on groceries. Cities may also collect up to 2 percent on food.

The consequence of a repeal would be a cut in government services. There isn’t any doubt about it. The only question is which area will be hit the hardest: Education? Roads? Corrections? Social services?

Second, fairness.

Gov. Rounds and the Legislature have installed a program that reimburses low-income families for tax they would spend on food.

So far, about 24,000 households are participating in that program, and Rounds hopes the number climbs to 45,000 by June 30 when the state’s budget year ends.

This program addresses, in an important way, the issue of sales tax regressiveness – the sales tax taking a proportionately larger bite of the wages of lower income workers.

South Dakota’s present tax system isn’t perfect, and it never will be. But the refund program for lower-income families addresses most of the unfairness of the tax on groceries.

A vote “no” will leave state law as it is, and that’s the vote that makes the most sense.

The Associated Press contributed information to this editorial.