The first legislative measures have finally been posted on-line by the legislative Research Council this evening, as they weren’t there this morning when I checked. This represents nearly thirty days longer to post the initial measures than in the recent past.
But better late then never.
House Bills
| Bill | Title |
| HB 1001 | establish a wine direct shipment license and wine carrier license to enable the direct shipments of certain wine in South Dakota. |
| HB 1002 | make an appropriation to the Department of Revenue to provide for the electronic submission of reports and taxes related to alcoholic beverages and to declare an emergency. |
| HB 1003 | repeal the alcohol wholesaler tax and to increase the occupational tax on certain alcoholic beverages. |
| HB 1004 | authorize the direct sale of distilled spirits from artisan distillers to retailers and wholesalers. |
| HB 1005 | repeal the foundation program fund and references thereto. |
| HB 1006 | allow bullheads to be used as bait. |
Senate Bills
| Bill | Title |
| SB 1 | finance improvements on the public highways and bridges by establishing or increasing the motor vehicle excise tax, taxes on fuel, motor vehicle registration fees, and wheel taxes, to provide for the distribution of certain revenue, and to establish certain state and local planning and reporting requirements concerning the condition of public highways and bridges. |
| SB 2 | provide for the establishment of river basin natural resource districts and to repeal certain provisions regarding county drainage management. |
| SB 3 | provide for mediation of certain drainage disputes. |
Anything we’re not seeing yet?
They probably have hundreds of these bills waiting but dole them out slowly. This change in doling them out later will probably make the legislatures take longer and longer.
The first four of 2015 have to do with wine and booze (I’m not opposed to either). It’s like we are fiddling when Rome burns.
Don’t forget bullheads!
this better come up early and prominently in the budget hearings
Incredible actually. Prohibition era statutes covering the sale of alcohol might just be rewritten this session. Better late then never is right PP! Cheers!!!
Here is where the rubber won’t meet the road:
The fuel excise tax rate for motor fuel and special fuel is:
(1) $.22 per gallon from July 1, 2015, to June 30, 2016, inclusive;
(2) $.2255 per gallon from July 1, 2016, to June 30, 2017, inclusive;
(3) $.2311 per gallon from July 1, 2017, to June 30, 2018, inclusive;
(4) $.2369 per gallon from July 1, 2018, to June 30, 2019, inclusive;
(5) $.2428 per gallon from July 1, 2019, to June 30, 2020, inclusive;
(6) $.2489 per gallon from July 1, 2020, to June 30, 2021, inclusive;
(7) $.2551 per gallon from July 1, 2021, to June 30, 2022, inclusive;
(8) $.2615 per gallon from July 1, 2022, to June 30, 2023, inclusive;
(9) $.2680 per gallon from July 1, 2023, to June 30, 2024, inclusive;
(10) $.2747 per gallon from July 1, 2024, to June 30, 2025, inclusive; and
(11) $.2816 per gallon on and after July 1, 2025.
The only way to insure enough tax receipts are taken in to cover the cost of highway maintenance material made from oil is for an indexing of the gas purchase price. These figures appear to assume gas will stay in that $3 range through 2025. What happens if gas jumps to $5 or $7? This bill will be extremely interesting to see evolve in committee.
Charlie, I agree the gas tax increase schedule seems quite tentative and disconnected from prices. Does Vehle have any analysis showing whether that schedule will generate enough revenue to meet needs?
Charlie,
I am not saying the tax is insufficient, sufficient, or excessive to fund our road construction and maintenance needs.
That said, I am not seeing your logic on indexing to gas prices.
The need is a defined dollar amount (need), the number of gallons used is relatively stable(consumption), thus a tax rate (rate) should be easy to determine. The math is simple:
Néed= Consumption X Rate makes sense to me.
I don’t know how you insure not having insufficient revenue and then excess revenue having the formula as Revenue= Price X Rate because Revenue will seldom equal need if gas prices change.
Indexing to a variable and volatile gas price will add variability and volatility to revenues unrelated to need.
Again, I don’t know if 22 cents is sufficient or not (need must be defined) but I am missing the logic of tying the rate to a volatile variable (gas prices) away from a stable variable.
I have the same comments as Troy. Did fuel use change significantly when prices approached $4.00 at the pump?
When crude hit $120 and gas was hovering around $4 the cost of the material to build roads went up as the price of crude rose while the gas tax stayed the same causing a huge increase in the cost of materials being paid for by the same dollars (if everyone drove the same) the per gallon tax was bringing in. A percentage of dollar amount of gas sold is the only remedy I know of to fix that consequential shortcome.
A 10% tax seems extreme to many but with a minimum tax of 22 cents or 24 cents and a maximum tax of 38 cents or 42 cents we would at least know the range of tax gas would be taxed at and a flow chart could easily be drawn averaging income while gas fluctuates. By 2025 does anyone know where the barrel price of crude will be at?
Also if we are serious about having the discussion concerning a balanced Federal budget receiving less not more from the Feds.
Charlie,
Good point as asphalt is directly impacted by crude prices. Maybe the solution is a partial indexing and as the relationship isn’t 100%. Do you know what % of road construction costs are asphalt? Again, the math is easy.
My comment and concern is it is imprudent to tie a fixed item to a variable.
Agree with partial indexing as that would insure that there would be added revenue coming in when or if crude rose to extreme levels. The cost of building a new layer of an asphalt mat associated with the cost of material is known. I’ll check that out.
Steve,
Just saw your Rome burning comment. This morning, I showered, shaved, dressed and played Trivia Crack with my niece before I did anything really of importance. That isn’t a reflection on my priorities for the day. And, neither is the early submission of some bills of lower significance.
Not only is the inference these bills represent the “priority” of the Legislature not true, but the inference likely doesn’t even apply to the submitter of the bills. In fact, they are just bills that came out of an interim committee that worked over the session. Neither can one infer that having a study means it is an issue of critical importance for it is as easy to infer study of an issue to a small committee is because it is of routine or minor importance.
This is a fallacy that includes making a generalization on both a small sample and unrelated data.
Definition of Fallacy:
1) a mistaken belief, especially one based on unsound argument.
2) a failure in reasoning that renders an argument invalid.
3) faulty reasoning; misleading or unsound argument.
You play Trivia Crack too? I sense a challenge!
Troy,
I just got off the phone with Secretary Bergquist after a good conversation of where the crude cost of oil affects road repair and new construction. When gas hit $4 a gallon it became very evident through DOT’s exhaustive search for product needed by the State. What few would think about as a reason for material increase was the refineries ability to refine lower into the barrel where the thick binding oil used for holding aggregate together comes from and still make a profit on it shrinking supply even more. Also in 1979 when the 22 cent gas tax was implemented gas was around a buck a gallon so had it been indexed then we would have had to lower the percentage later as the revenue would have greatly exceeded cost.
Another factor coming into play which is hard to analyze are the increased costs of hauling, paving, delivering and heating the thick oil used in binding aggregate as the price of gas and diesel rises.
Still trying to figure out a sound percentage of material cost over total cost of a mile of new three inch asphalt.