Another wrong answer on taxes? Why don’t we return some of those unwanted tax dollars to the rightful owners?
The Rapid City Journal is reporting tonight that State Representative Gordon Howie came up with his plan to alleviate property taxes. By dumping one third of the burden onto consumer spending:
Rep. Gordon Howie, R-Rapid City has a bold idea to reduce property taxes statewide by 35 percent – at the stroke of a pen.
“It’s pretty simple,” Howie said Tuesday. “I’ll propose a 2 percent increase in the state sales tax.”
That would earn the state more than $300 million, Howie said. The state collected about $848 million in property taxes last year, so the math is simple. Divide 848 by 300 and you get 35 percent.
“This will be a huge step toward fairness in taxation,” Howie said.
and…
Howie said the measure would help seniors on fixed incomes keep their homes and help young families buy homes.
Howie doesn’t have any sponsors yet, and the Legislative Research Council has yet to draft his bill.
Read that all here. Asolution? That seems to not be much more than a shift. So would his bill also shift the burden 2 cents farther onto farm implements and vehicles? If you’re reducing property taxes by a thousand or so, and increase it by the same amount on tractors and combines, as well as seed, feed, fertilizer, etcetera.. I don’t see how that benefits the ag producer who would likely be a proponent of this measure.
Too many of these approaches seem to me to be wild shots in the dark that propose to overhaul the system in one fell swoop. And of course, in their simplicity, they cause as many problems as they solve.
We didn’t get to our problems in a day, so how can we expect to solve them in one. Or in a session.
If I was in charge of things, I’m sure I’d come up with a few ideas for our property tax woes. But not from the standpoint of figuring out who to collect it from. I’d be more concerned with figuring out how to give it back.
What would I give consideration to in property tax relief? Let’s look at the budget reserve and trust funds. I’ll be the first to tell you we need them, but in the big scheme of things, do we need reserves of such magnitude? You’ll see figures ranging anywhere from $50 million to several hundreds of millions of dollars.
If reality is somewhere in the middle, that leaves me with the question – why does state government need to be sitting on that much? Because it represents tax dollars collected that weren’t needed. Or better yet, Tax dollars that were invested and provided a significant rate of return.
In arguments over what State government should do with the excess money in reserve, you hear Democrats say we need to spend it on education, or some other one-time thing. Republicans largely talk about the reserve as being inviolate and sacred.
What about door number three? When was the last time you heard a South Dakota politician propose that at least some of the excess money collected (at one time or another) from citizens by state government be directly given back?
I’m talking about a direct cash rebate sent to property owners. Jesse did it in Minnesota. Why can’t we do it here, given our reserves?
Now that’s a proposal I could get behind. And I didn’t have to figure anyone who I had to take it from.
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Comments
Sorry if you don’t ‘get it,’ Jones Girl – I’m one of those annoying people who consider the source of tax dollars.
Every dollar in reserve at any level (city, school or state) is money that they didn’t have to collect. It’s taken from taxpayers to sit in government’s bank account.
Frankly, if they don’t need it, I wouldn’t mind it back, as opposed to them coming up for an excuse to spend it just because “it’s there.”
Yes, I did play “it’s the taxpayers’ money” card. If you can’t recognize why that’s important, then I hope to god you’re not an elected official.
It’s hard to believe, but Pat Powers finally admits South Dakota has too much money stashed away in reserve accounts. Be careful Pat you’re standing dangerously close to Scott Heidepriem.
While Scott would use that excess money to solve some of our education funding problems, PP would send it back to the proletariat in some sort of rebate program.
Oh well, a journey of a thousand miles begins with a single step.
Nick: I would trust the people who earned it over Scott on what the best disposition is for any excess funds in the reserve would be.
Do we need a reserve? Absolutely. “What should that amount be” is a good question.
I’ve got around to that way of thinking because of this school debate. If it’s ridiculous for schools to bank as much as they are, it doesn’t make much sense for the state to bank huge amounts, either.
governments ought not have large stashes of cash in reserve. it’s not their money. it’s the people’s. give it back.
that said, i think howie’s idea is interesting. of course, the details need to flushed out, such as whether he adds the 2% to food, as well (he shouldn’t), but i applaud him for coming up with a new idea, an idea that might just actually be a good one.
The difference between the Dems and the GOP on the “reserve funds” is what they consider to be “reserve funds.” The GOP considers the budget reserve fund and the property tax reduction funds to be reserves, but not the principal of the trust funds. The Dems want to spend the principal of the trust funds, and refer to that as being part of the principal.
As for this property tax plan – it seems to be a shift in the tax burden from property-owners to those who do not own property. That’s a basic policy decision for the legislature.
Pat, you and Scott agree on the most important point, the state has too much money stashed in savings accounts. That position is one Mike Rounds and the vast majority of the Republican Party is unwilling to take.
Welcome to the Dark Side Pat. (cue weird breathing noises)
Sales tax is a good idea. That way renters and transient workers would be paying a fair share of the taxes. Last I checked, they used the roads, hospitals, public parks, and educations system too. How much more would we take in from the out-of-state workers building future rail lines, roads, ethanol plants, oil refineries, etc.
8.8% of our general fund budget is our reserves. (Lower than most of our schools and local governments BTW)
The rest is the Trust Funds that 3/4 of the people of this state said state government will not touch the principal and shall grow with inflation.
Who can argue with those numbers?
j 11, renters pay tax, now, but it’s hidden in the price of their rent. with howie’s plan, i’m assuming that rents would go down or at least not increase as much as normal. and, then, renters would finally be better able to determine exactly how much they’re paying in taxes.
Somebody must have dropped Howie on his head when he was an infant. That clown calls a 2 cent state sales tax hike a 2% hike? It is not. It is a 50% state sales tax hike, and for what?!!!?
Howie needs to stop lying about this being 2% when it is a 50% increase.
If you’re in agriculture you pay far more than your share for sales taxes thanks to that SOB Janklow who expanded sales taxes on everything under the sun for a property tax relief plan that turned into a farce.
When politicians like Howie or Janklow start talking about new taxes to lower property taxes, farmers and ranchers lose their shirts every time. And cityfolk just swap taxes with no relief.
Howie can take his new tax out of the microwave and put it back in the freezer. It is dead on arrival.
16. Remember, Coot, Howie is the guy who — in defense of HB1215 — told us that pregnant cows are worth more than cows that aren’t pregnant. Someone should have given him the big boot right then (…and to be fair, I think he said his wife actually did. …not sure if she was wearing Olathes however, or even how big her foot was.)
If #13’s numbers are correct, I come up with about #33.5 million based upon a budget of about $3.8 billion. Am I right about this?
Question 1: What is the reason for a budget reserve? My understanding is that it is for times when income does not match projections.
Question 2: What is an appropriate ratio of reserve to budget? I like to have 10% or more of my yearly income in reserve for emergencies.
Question 3: If we are going to spend money from the reserve on expenses that repeat yearly, how will do you propose to make up that money when the reserve is gone or down to the level you believe to be appropriate?
Coot, nice try to blmae Janklow. The broadening was approved by the Republican controlled legislature in 1979 to fund the repeal of the presonal property tax. But don’t let facts get in the way of your blabering.
Coot is of course full of crap.
Mostly he stores it in his boots.
His feet are really size 8.5.
Yet he promotes his himself as a 13.
To intimidate.
Mostly bullshit, I bet.
All hat, no cattle.
You won’t find me agreeing with Old Coot very often, and I don’t on the Janklow claims…but you know what they say about the “tax and spend” liberals.
Hmmm, isn’t Howie a GOP guy?
tony dean, why would you question howie? his proposal isn’t pertinent to the discussion about reserves. he has a good idea. give him his props.
as for all the cash in reserves, shame on the governor and legislators for not at least trying to give it back to the people who gave it to them.
To Old Coot,PP and others: it’s not really fair to say farmers pay more than their fair share on sales tax, since there is NO sales tax on feed, seed, fertilizer,ag chemicals,and semen. This bill would help them since it would reduce property taxes and have no effect on most of the things they buy since they are sales tax exempt already.
As a recent transplant from Minnesota, I loved it when I got the check from Jesse “the body” Ventura. I even enjoyed his renegade style. What I didn’t like was watching how Governor Pawlenty, handcuffed by his no tax pledge, bankrupted small communities and taxed…oops I meant imposed exhorbitant fees on a number of different aspects of our economy.
Let’s not make the same mistake here.
Sometimes I get the feeling that being a true “conservative” in SD means being that your sense of community ends at the fence in you back yard. Quite frankly this is the last place in the world where I thought “What’s in it for me” would be the dogma of politics.
Increasing sales taxes to reduce property taxes could be a good trade-off. To sweeten the deal for the Dems I would throw in a sales tax exemption on food across the board. Then allow local governments a limited amount of sales tax authority to offset the property tax reduction as well. That could include counties, schools and municipalities. We have a great sales tax system and a broken property tax system. Why not use the better of the two to a greater extent?
If Howie thinks adding more to the cost of gasoline is a good idea, let him take it out on the street and ask voters. I’m betting he didn’t list that cause on his platform when he ran for office.
“Jesse did it.” That tells me something, even if I didn’t know what to think about the rest of the post. Shall we make a list of all the excellent things Jesse was widely known for? I would have thought you’d seen and understood enough numbers in Pierre to have a little more respect for the process than to suggest a rebate. Good grief, the quality of your discourse has declined in the last few days. Some of us read you for good information, not stock-in-trade political gamesmanship. Go ahead and protest that “you’re serious,” or play the “it’s the taxpayers’ money” card. They’re the next ones in the deck you’re evidently playing with, right in there next to the “nanny state” jack.