“This is the year to get out of last place.”

“We all want what’s best for our children. We want to provide them with a quality education. And we know that requires a strong workforce of great teachers. This is the year. This is the year to get out of last place.” – Governor Dennis Daugaard

by Carl Kline

The major focus of the Governor’s State of the State address this year was education. Responding to the report of the commission he established in 2015, the Governor proposed a raise in teacher salaries that brings them into a more competitive position with surrounding states. Perhaps, if the legislature approves and other states don’t raise their salaries for teachers, we can get off the bottom of the pile.

The Governor needs to be complimented for actually doing something with the commission report instead of leaving it to languish with other past recommendations. And the legislators need to be encouraged to approve the funds necessary.

The one fly in the ointment is the recommended funding source. The Governor proposed a 1/2 cent addition to the sales tax to raise the necessary revenue. The sales tax is the most regressive tax available, especially in a state like South Dakota, where we join only fourteen other states that tax groceries and are one of only three that tax food essentials at the highest rate of 5.5%.

What we end up doing by raising the sales tax is making teachers pay for their raise, along with all those others in the state who are struggling to make ends meet. One wonders if we will ever have some legislators who will raise the issue of taxation in a serious way. In an age where even the Global Economic Forum sees income disparity as a major problem, one would think some people of courage could raise the forbidden phrase “corporate income tax.”

When Citibank relocated a portion of their operations in Nevada to South Dakota, the Legislature changed the bank franchise tax statute, so Citibank would only pay taxes on income coming from South Dakota customers. Prior to this, South Dakota had been taxing all the bank income. How many millions were lost for teacher salaries and other state needs is simply a guess. The legislature could reinstate the tax and we could find out.

Citigroup received a total of $2.5 trillion in financial assistance from the Federal Reserve during the financial crisis, paid no federal income tax for four years from 2009 through 2013 and in 2015 earned $17.2 billion.

If South Dakotans, who likely agree we should pay our teachers more, want to know where the money is coming from, they only need to look to their next purchase at the grocery store, or their cable TV bill, or the charge for their haircut, or their music lesson, or their newspaper subscription, or their snow removal, or their plumbing bill, or their internet access, or their pest control, or their funeral service.

 

Advertisements

Comments

  1. Yes! Thank you. As much as South Dakota needs an increase in teacher pay, a courageous funding proposal should be made to make that happen. Daugaard put up the proposal, and it’s a strong one, now the legislature needs to internalize that stance and find an equally bold funding source that doesn’t include struggling SD citizens and teachers.

  2. Bill Powers says:

    An increase in the sales tax by half a cent will increase the sales tax rate from 4% to 4.5%. In 2015 about $841 million was generated from sales and use tax receipts. Increasing the sales tax rate to 4.5% will result in about a $105 million increase in revenue. There are about 9000 teachers in SD. Daugaard wants to increase their salaries on average by $8000. This means that it will take about $72 million to do that, leaving about $35 millions (Daugaard says $40 million) left over for other things. It looks like the purchase of food represents about 8-9% of sales tax revenues.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: