House lawmakers are passing a bill to remove the tax on food.
The last-minute proposal will set up a fight between the Republican-controlled House and Senate over a long-held Democratic policy priority.
The final week of session just got more complicated.
State legislators are putting together a budget that spends one-time federal and state dollars on a variety of infrastructure projects. Some lawmakers say on-going revenue will increase going forward.
That’s leading House members to push for some form of a tax cut. Republican Rep. Jon Hansen, of Dell Rapids, says the state has $90 million in ongoing revenue that is unspent.
“The question becomes what are we going to do with it?” Hansen says. “Are we going to spend every last dime? Or are we going to take the opportunity to the people? I just think we should allow the people to keep more of their tax dollars. It’s what’s best for families and individuals.”
State officials estimate removing the food tax will save taxpayers $82 million a year.
The idea has been a priority for state Democrats for years. Democratic Rep. Jaime Smith, of Sioux Falls, says the food tax is regressive.
“Percentage wise, what it takes out of a poorer person’s income is much greater than somebody that has more means,” Smith says. “It’s not an even tax in any way shape or form, because you have to pay for your basic needs.”
A proposal to remove the food tax has already failed in the Senate. Senators along with the governor’s office, have been reluctant to reduce taxes this session. They’re worried the state could face decreased revenue collections in the future.
The policy debate will add further tensions to budget negations during the final legislative week.
