I was reading an editorial from my local paper, the Brookings Register, where the publisher brought up an interesting point from a recent Crackerbarrel, when someone from the audience asked whether South Dakota’s status as the least taxed state in the nation was A. An Accomplishment, B. An Embarassment, or C. Other. The publisher also brought up that legislators also bemoaned that state revenue projections were “likely to leave the state 10-15 million short” in the next two fiscal years.
If I were asked, I’d argue that it’s a good thing that our state is the least taxed in the nation. Why? In case someone missed it, we’re also 46th in population. There aren’t a lot of companies or employers who when determining where to locate are actively seeking “sparsely populated areas with sweltering summers, punishing arctic winters a plus.” So, we need to capitalize on what we do have. And the ability to tax ourselves less is one of them.
The tradeoff is that yes, we run ourselves a little closer to the redline than some might like. We tend to be less spendthrift in word and deed. Some might call South Dakotans downright tight, or conjure up a cultural reference such as German frugality.
Whatever the cause, we tend to be tight with a buck, and are not terribly interested in handing it off to government to do as they please – which causes this give and take, or tug of war between taxpayers and taxspenders. Or you might say it’s a battle between our wants and not our needs but rather our “means.”
So, I pose the question to you, the SDWC reader: Does South Dakota need low taxes, or do we bring financial woes upon ourselves by them being low?