A bill before state lawmakers changes the way the alcohol tax is divided, in an attempt to cover costs of local law enforcement.
Currently the revenue generated in the Alcohol Beverage Fund is divided two ways local towns and counties get 25 percent of the fund and the state gets 75 percent.
Senate Bill 2 changes that to divide the revenue three ways between the state, county, and town.
GOP State Representative Leslie Heinemanntestified in favor of the legislation. Proponents say local governments are on the hook for prosecuting, defending, housing, and transporting inmates who are convicted of alcohol related crimes. Heinemann says this is a burden on local government budgets that should be more fairly supported by state revenues.
“Now you have the opportunity to give the counties just a token of the reimbursement for their costs,” says Heinemann who was on the summer study committee that recommended the bill.
“Many testified that up to 80 percent of law enforcement and court costs are directly attributed to alcohol. And when we were apprised of the split of the alcohol beverage fund it just seems quite inappropriate that the city, or the county was left out of that equation,” says Heinemann
More than a dozen people spoke in favor of the change. One spoke against. Jim Terwilliger, the State Economist, says the South Dakota would take a hit of about $3.8-million dollars.
“$3.8-million may not seem like a lot. But it is a significant amount. It takes about 7.4-percent off our revenue growth form fiscal year 16 to 17. And so, that is a big hole to fill,” says Terwilliger
Terwilliger says there is no statute mandating alcohol tax revenue needs to fund law enforcement. He says currently the tax supports the general fund and lawmakers will need to find the missing revenue elsewhere. The committee disagreed and passed Senate Bill 2 unanimously, it heads next for debate on the Senate floor.