Survey shows South Dakota lawmakers reluctant to raise road construction, maintenance taxes

Survey: SD lawmakers reluctant to raise road taxes

PIERRE, S.D. — South Dakota lawmakers are reluctant to raise taxes and fees to support construction and maintenance of the state’s highways and bridges, according to a survey by The Associated Press.

Only a quarter of those who responded to the survey said they would support a proposal from a legislative study committee to boost the state gas tax, the excise tax on vehicle sales and the annual vehicle registration fees to provide more money for state and local roads.

State Transportation Department officials and members of the legislative study committee argue that the road taxes and fees, last raised in 1999, need to be increased so roads and bridges can be kept in good shape.

Senate Republican Leader Dave Knudson of Sioux Falls, a member of the study committee, said the panel’s plan seeks too large an increase in taxes and fees. Knudson said he would support smaller increases in taxes and fees because he believes some additional money is needed for roads.

The study committee’s plan is unlikely to pass during the legislative session that begins Tuesday because few lawmakers other than those who served on the committee support it, Knudson said.

Senate Democratic Leader Scott Heidepriem of Sioux Falls said he opposes a boost in the gas tax, particularly during the economic slump, because it hits lower income people harder than it hits more affluent motorists.

“I don’t think this is the right time to consider tax increases. We don’t need them,” Heidepriem said.

Seventy-two of the 105 members of the Legislature responded to the AP survey by mail Dec. 14-31.

While 26 percent said they support the study committee’s tax proposal, nearly 46 percent said they oppose it and about 29 percent said they are undecided.

Transportation Department officials have said the cost of building and maintaining roads has risen substantially in recent years, but tax and fee revenue has grown little in that same time. A DOT study found that an extra $160 million a year in state and federal funds is needed for state highways, and an additional $80 million a year is needed for county, city and township roads.

The legislative study committee has proposed a bill that would raise road taxes in two stages, with half the increase imposed in May this year and the other half in 2012. It includes proposals to boost the state gas tax by 10 cents a gallon and increase annual vehicle registration fees by $18 for a typical car by 2012.

The bill would raise the current 22-cent-a-gallon gas tax to 27 cents next year and 32 cents in 2012. The state excise tax on vehicle sales would rise from the current 3 percent to 3.5 percent next year and 4 percent in 2012. When fully implemented, those changes would give the state an extra $75 million a year for roads and bridges.

Counties get money from annual vehicle registration fees, which are discounted 30 percent for cars and trucks more than 5 years old. The committee’s plan would increase those fees, which are now much lower than those of nearby states, and change the discount to apply to vehicles more than 10 years old. Those changes would give local governments more than $30 million in extra revenue when fully in place in 2012.

For example, a typical car is now assessed an annual registration fee of $42. The fee would rise to $60 by 2012.

Knudson said he would support a bill that sought smaller increases. He backs a plan that would increase the gas tax by only 3 cents a gallon and would raise vehicle registration fees by only $10.

House Republican Leader Bob Faehn of Watertown said a highway funding bill is the only tax that has any chance of passing this year. He said he has been surprised by the number of people who have asked him to pass it.

“I’ve never heard the public ever support a tax increase before,” Faehn said. “It’s not widespread, but I’ve sure had more people tell me we should do that than people who come up to me and say don’t even consider it.”

However, House Democratic Leader Bernie Hunhoff of Yankton said a tax increase makes no sense because many people cannot afford existing taxes during the economic slump.

“You just can’t tax your way out of a recession, and that’s what I think a lot of legislators realize,” Hunhoff said. “It’s just the wrong time to increase any taxes. If there’s ever a right time, this is the wrong time.”