Release: Tourism Coalition of South Dakota (TCSD) Urges Voters to Reject IM-28

Tourism Coalition of South Dakota (TCSD) Urges Voters to Reject IM-28
IM-28 is a Threat to South Dakota’s Communities and Tourism Industry

Pierre, SD, October 15, 2024 – The Tourism Coalition of South Dakota (TCSD) opposes Initiated Measure 28 (IM-28), warning that the measure would create serious financial challenges for communities large and small across the state. From family-owned businesses to major tourist attractions, the consequences of IM-28 would affect every corner of South Dakota’s tourism industry.

Potential $646 Million Revenue Loss

IM-28 could strip up to $646 million from South Dakota’s budget, a deficit that would impact all communities and essential state programs. With 80% of state expenditures going to education and health & human services, the resulting budget shortfall would disproportionately affect children, patients, and seniors. “The loss in sales tax revenue would force devastating cuts to local programs, which are essential for attracting visitors and supporting local businesses across South Dakota,” said Carmen Schramm, Executive Director of TCSD. “IM-28 would hurt every South Dakotan — from small business owners to large employers, and from city streets to rural roads,” added Schramm. “We cannot afford to weaken the funding that supports our towns, schools, and health services.”

Impact on Local Communities 

The effects of IM-28 extend beyond the state budget. South Dakota communities will be prohibited from taxing items the state cannot tax under SDCL 10-52-2, which states that “no tax may be levied … unless such tax conforms in all respects to the state tax.” Since IM-28 eliminates taxes rather than setting them at 0%, this provision would significantly impact local budgets. This means that towns and cities will lose a critical source of revenue, including taxes currently collected on tobacco, vapes, and other related products. As a result, additional cuts to local budgets could affect essential services like law enforcement, road maintenance, public pools, and parks.

Risk of Income Tax

IM-28 could also fundamentally change South Dakota’s tax system. With such a significant revenue shortfall, there is concern that a ballot measure might be introduced to establish an income tax to compensate for the lost funds, placing a heavy financial burden on taxpayers statewide.

A Coalition to Protect South Dakota’s Future 

The Tourism Coalition of South Dakota (TCSD) has joined more than 60 organizations and over 75 cities and towns that have passed resolutions in opposition to IM-28 as part of the “No on

IM-28” campaign. This coalition is working to educate voters about the serious risks posed by IM-28 and the potential harm it could inflict on the state’s economy. You can visit their website to learn more: nosdincometax.com. “IM-28 is poorly drafted and will lead to major cuts to the state and municipalities or it sets us up for major tax increases,” said Nathan Sanderson, Executive Director of the South Dakota Retailers Association. “Don’t take the bait; vote no on IM-28.”

About the Tourism Coalition of South Dakota (TCSD):

The Tourism Coalition of South Dakota represents a diverse group of businesses and organizations working to promote and protect South Dakota’s tourism industry. TCSD advocates for policies that support tourism’s role as a key contributor to the state’s economy, ensuring the industry’s sustainable growth.

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