Monday, November 10, 2014

Functioning Roads In SD Mean Higher Taxes. But Putting The Bite On Users? Not Such A Great Idea. And By The Way, How Come We're Just Now Getting Some Hard Numbers On This?

     Looks like South Dakota will have to pop for something on the order of $400-$500 million worth of road repairs over the next decade or so.  So says State Senator Mike Vehle (R) from Mitchell, who heads up a legislative committee that's been studying this since last Summer and has just turned in a report that goes before a state board this week.  I guess my first question is, why hasn't the penuriously-natured Governor Daugaard anticipated this sizable bite and set aside some kind of reserve for it?  Everybody knows that roads and bridges all over this country, particularly in our rural states, are in tough shape, and if memory serves we've been hearing about this phenomenon in South Dakota for the past few years. A report put out in 2013 by the American Society of Civil Engineers showed that 26% of our bridges are functionally deficient or structually obsolete and that 61% of our roads are in poor or mediocre condition.   Now all of a sudden a team of elected officials goes out there and discovers we've got a half-billion dollar fix-up job staring us in the face?
     My guess is that a sizable reserve set-aside (it doesn't have to be cash, just a notation that it's some sort of contingent liability as an adjunct to the budget would have sufficed) for road repair would have taken much of the luster off Daugaard's carefully constructed "balanced budgets," the pride of his re-election campaign.  Accountants have their own ways of doing things, but the net result should have been some indication that we South Dakotans will have to pony up for some serious bucks in coming years.  I don't recall being informed of such, and now our elected officials are tasked with the burden of how to raise all that dough.
     Along with that comes the huge political hassle of figuring out who will pay for the work. I get the sense from the KELO story that Vehle's committee is taking the "pay-to-play" approach, generally putting the burden on those who most use the roads, which I suppose has a certain ring of fairness to it.  People that most directly gain the benefit of good roadways seem like a reasonable target for raising the money to keep them up.  But as Rep. Jim Peterson (D) of Revillo notes, the committee's recommendations are "too high of a burden on Ag."  That's a sentiment I have to agree with.  As it stands, I think the Ag industry in this state gets a sweet deal on sales tax exemptions, to the tune of more than $200 million a year, per this 2013 report for the South Dakota Department of Revenue.  I'd be the first to say that these (and another $300 million/yr's worth of exemptions scattered among numerous other industry groups) could stand some review.
     But where sales tax exemptions are probably a historically justified "underload" that could use some review in the context of current economic conditions, I think putting a disproportionate burden on the Ag sector for road maintenance is an "overload."  To my way of thinking, roads are the essence of South Dakota's economy, which is based on movement of goods and people (tourist types in particular, who come here by the millions).  There is such an enormous spillover economic effect from these two primary industries that virtually every South Dakotan directly benefits from them.  This is why I think the cost of maintaining the arteries that pump the lifeblood of money into this body politic of ours should be supported by the whole of the system that exists because of them. While this isn't necessarily the case in the big, urban states where entire sub-economies exist with little or no dependence on highways, South Dakotans are symbiotically dependent on their roads in order to hold their state and economy together.
     And one more thing.  Equalizing the burden spreads the awareness of the cost out over the population.  In a one-person, one-vote society, this sense of individual ownership lends itself to individual oversight--and that has to be a good thing.


  1. One correction, Rep. Jim Peterson is a member of the Democratic Party.

    Nick Nemec

    1. Noted and duly corrected above. Thanks, Mr. Nemec.