Tuesday, March 3, 2015

They Might Well Be "Americans For Prosperity," But Their Local Chapter Should Be Called "South Dakotans For Stagnation."

SD Fish Story
Low Taxes = Great Economy?  Please.
(photo from movalley.wordpress.com)
     The "Americans For Prosperity" has a South Dakota chapter that is way off base in its assessment of what is and is not advantageous to our state.  Its SD state director Ben Lee last week  on KELO radio was bashing a bill (SB 135) working its way through the state legislature that would give cities authority "to impose an additional sales and use tax for a limited period of time for a specified use."  Lee raises the spectre of every city in South Dakota applying this tax and creating a net tax increase of $150 million, "which would be far and away the largest tax increase in the history of South Dakota."  This is ridiculous, as it assumes every city in the state could convince a majority of its voters to support a significant, if temporary, tax increase--a prospect that is so far-fetched as to be a non-starter as an argument against passage of the bill.
     It's surprising to me that a spokesman for one of the most conservative groups in America, the Koch-financed Americans For Prosperity, would support their South Dakota proxy's complaint about taxes being assessed at the local level.  Aren't we Republicans supposed to cheer the prospects of public decisions being made at the local level?  What could be closer to the people than a municipality making tax-and-spend decisions within the confines of its own borders? Apparently the AFP's contempt for taxes at any level doesn't make room for citizens being able to assess them for themselves, even when it comes to their own home towns.  Lee is way off base on this one.  If anything, SB 135 is a step in the right direction, keeping tax authority as close to the people as practical and possible.  
     More revealing of the stagnation-oriented mindset of these so-called "Americans For Prosperity" is the oft-repeated canard that "South Dakota's economic advantage is our low tax structure," as Lee puts it in his interview.  I think this is crazy, and the results of our so-called "low tax structure" speak for themselves, especially as compared to the muscular economic growth of states that have a much higher tax structure than South Dakota's.  I'm thinking specifically of our next
High Taxes A Disadvantage?
Spare Me.
(table from www.gallup.com)
door neighbors to the east, Minnesota, where the economy is roaring.  In 2013, the Tax Foundation ranked Minnesota as the 7th HIGHEST taxed state in the country.   In 2014, the Tax Foundation ranked South Dakota as the 10th LOWEST taxed state in the country. Comparatively speaking, that should be great news for our economy, right?  Uh-uh. L
ast week, SD Lt. Governor Matt Michels was forced to concede to the state legislature that South Dakota's soft economy has resulted in far less-than-expected tax revenues to the state. Meantime, Minnesota has a tax SURPLUS of nearly $2 billion.
     So.  Here we sit, with our "economically advantageous" low-tax policy, mired in a struggling economy while our highly-taxed next door neighbors move forward with some eye-catching velocity.  I guess my question to Lee and his AFP patrons is, just exactly how is it to South Dakota's "economic advantage" to have our low tax structure?  I think your assertion is pretty nutty, myself, but I'd love to see how you come up with that conclusion.  And please don't resort to using those irrelevant lists about "best business climate" that mean zip in terms of actual business and economic development.  

Addendum (added @ 1255  on 3/3/15:  You can find the Black Hills Knowledge Network site that Eric Abrahamson posted in the comment section HERE.


  1. John: If your readers are interested in data on the growth of the South Dakota economy, they can find it at www.southdakotadashboard.org. For example, see the chart on GDP: http://southdakotadashboard.org/economy/economic-output-gdp#0-7131-g. Users should be sure to hover over the "breakdown" menu in the top left corner of the chart so they can slice and dice the data according to their needs. Eric

    1. Thanks, Eric. You guys at the Black Hills Knowledge Network are doing a great job. Readers, if you haven't checked out this storehouse of info, you should.

    2. Also, readers, you can link directly to Eric's site by going to the addendum at the end of my post above. Thanks again, Eric.

  2. This is a dumb question: cities don't have a right to impose such a tax already? We need a bill to create a transitory tax program for special funding? That seems wrong somehow. These folks do realize that investing in say, a city-owned utility company putting up a solar/wind farm for their community or city operations should maybe COME from the community, not the state or feds or sucking at some corporate teat? Our cities are groveling in Pierre and all over the place for funds for water projects, etc., and people just say, sure, have at it. We have serious issues with fraud, too, in our state. The state auditor general has no teeth when it comes to pressing charges on city's that fudge with their reporting and audits. Maybe this sort of crony bullshit and disfunction would stop if citizens knew it was THEIR money being screwed with. Just a wild thought.